Does the collapsing gold market vindicate the economic elites?

Since the crash in the price of gold, most in the mainstream financial world have warned that gold should be sold, that the bull market in gold has ended.  Their view is that the Keynesian policies of fiscal stimulus by Congress and monetary stimulus by the Fed are working to get the economy to recover.  Inflation is not a concern, in their view, so gold, being an inflation hedge, is not needed in your portfolio.

We even get this gem of wisdom from Business Insider:

“It’s great that our economic elites know what they’re talking about, and have the tools at their disposal to address crises without creating some new catastrophe.”

The gold bulls, on the other hand, see things slightly differently.  To them the decline in gold and silver prices have provided an excellent buying opportunity since the long term trend in these precious metals continues to be up.


Because the Federal Reserve and all other central banks continue to inflate and print money in  unprecedented amounts in an effort to stave off recession.  As Economic Collapse News has reported, central banks around the world are engaged in a currency war, a race to the bottom of who can devalue their currency the fastest, with Ben Bernanke of the Federal Reserve leading the way.

Consequently, Austrian economists see mass inflation in the future for the U.S.  Perhaps not hyperinflation but mass inflation, being a condition of 20% – 30% inflation per year, will still be quite damaging to the purchasing power of the middle class.  If the economic collapse takes the form of mass inflation or hyperinflation, millions will have their wealth completely wiped out.

By buying gold with their savings the middle class can at least protect the purchasing power of those savings and not have the government effectively reach into their pocket and steal it.  The decline in gold and silver has given anyone interested in doing this a tremendous opportunity to get into the market at lower prices.

Gold and silver are not recession hedges so the fears of recession setting back in here in the U.S. have been a cause in part for the sell-off.  This is hardly a vindication of the economic elite’s central planning of the economy as the folks over at Business Insider would have you believe.

To any casual observer inflation is a concern not just in the future but right now.  Just go grocery shopping and it is already quite apparent that prices are going up.

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  1. David Anderson says:

    The economic elites sure have their work cut out for them. With gold prices expected to rise after this recent fall in the price of gold I would like to see if the economic elites respond with more buying or selling of the physical gold. I think the gold analyst section at will be a better place to follow whats really happening in the gold market. I was never a big fan of the WSJ.

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