Gold rising is not a bubble; it is an omen of the future defaults of governments.

Gold rising is not a bubble; it is an omen of the future defaults of governments. Paul Krugman scoffed and derided analysts who said gold would rise to $1500. Apparently, the Nobel prize went to head and he stopped listening to reason or knowing history.

To wit, since the 1500’s governments have been defaulting on their money. First barter, then came metal exchanges, then metal coins. Governments first shaved the coins, then used cheaper metals, then paper money was introduced. At first, it was backed by metal (gold, silver) but then governments became more creative and eliminated the metal redemption promises. Then, the stealth nature of the printing press was discovered. Give a peasant two paper dollars instead of one and he is deluded into believing he is better off. America is filled with similar thinking peasants and are reinforced by the self-serving business media that supports more and more stimulus. Then came Bernanke’s crowd of quantitative easing and FED manipulation of interest rates. Coupled with the self-serving government’s penchant to pay-off cronies, other connected folks and favored programs, wars and entitlements and you have the stealth invention of off balance sheet debt. SS and medicare is approx $40 trillion and is coming due over the next 10 years. All totalled off balance sheet debt is $55 trillion and growing by billions every year.

- Dandy Don

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