Friday, June 10, 2011

Anyone see Gold Here?

Where is the world at right now? What, if any, is the progress to get us out of this international debt bubble?

New Zealand's Reserve Bank has kept the interest rate charged on its money unchanged. Unlike many countries who are fighting inflation with increased interest rates, New Zealand has seen it prudent to remain at the status quo.

But it's all spitting in the wind. Yes, it is easy to be negative in this climate, but we are seeing the major flaws of Central Banking manifesting itself.

The demand and supply of money cannot be controlled by one entity. Yes, we have heard the arguments that an independent central bank is apolitical. But look at what is coming soon in the USA and New Zealand. Elections.

Keeping the politicians out of manipulating the Central Banks (and they have ways of doing this) is like keeping this writer from walking past the door of a cafe.

The Federal Reserve and the NZ Reserve Bank are seeing their respective economies roll over. The Fed will stop QE2 on June 30. Wall Street is nearing critical levels signalling a large sell off.

New Zealand's low interest rate has rewarded those who still want to consume (import costs down and cheap interest rates causing the housing bubble to continue).

Who, on this planet, would want to save money when the difference between inflation and deposit rates are negative. And why aren't more people complaining about this?

Now with the share/stock markets beginning to tank, all the 401Ks and the Kiwisavers in this world will fall in value. This will hurt those coming into retirement.

So basically the new Great Idea from the Wise Ones is this: to cure the debt bubble, you pump more debt into it. Like curing my cold by standing in a snow storm.

You simply cannot produce wealth by printing credit (creating debt). Money supply needs to run free and the market needs to take it to its natural level. This intervention by Reserve Banks will destroy our economies.

The answer is a monetary system that is independent from conniving politicians, and is based on a finite, tradable, fungible, divisible and universally recognised asset.

Gold anyone?

Gold in New Zealand dollars: $1868.99 per oz
Previous all time high: $1955.10 per oz

Silver in New Zealand dollars: $45.29 per oz
Previous all time high: $48.58
per oz

The Anglo-Far East Company
The Original Private Bullion Custodian
Your reference: an-001

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