 Riding
the Volcano
Alex
Wallenwein
September 13, 2004
Is Gold really being "controlled"?
Look at the price of gold that the London Gold Pool tried to
maintain: about $35 an ounce. How successful were they? Today,
gold is over $400 an ounce. It has been above the $300/oz. mark
for the vast majority of the years since 1980 - despite all manner
of "fine-tuning" of the fractional reserve/fiat-banking
system.
Do you still think the manipulators are so overwhelmingly powerful?
Think of the volcano they have set themselves up to ride - into
either perpetuity, or into their doom. They are trying to keep
a lid on it.
Fat chance!
It's like, in order to prove to their prospective subjects (us)
that they are the "masters of the earth," they have
mounted the volcano of gold price suppression at a time of relatively
low activity. Evert tiny little rumble was interpreted by those
of us who are betting against their power as potentially "the
big one" - only to leave us disappointed and thereby making
the "riders" appear more powerful.
But they realize full well the downside of the gamble they have
engaged in. They realize full well that the more time passes,
the more success at "taming" the volcano they can claim
before us, the closer approaches the hour of their inevitable
destruction.
Most gold investors follow this logic to some extent - but they
want their profits NOW.
The real problem for gold investors is that they have a relatively
short time horizon. They have neither patience nor the ability
to wait. Since they want profits - i.e., a higher return in paper
money than they put in - their eyes are not really on the stability
and inherent soundness of the underlying asset - gold.
So they leverage themselves to high heaven, believing themselves
to be either lucky - or smart - enough to predict the exact timing
of the coming "crash."
Because their time horizon is so narrow, they set themselves
up for the same inevitable failure as the "masters"
of the volcano, except that their failure is inevitably a near-term
phenomenon, while the "masters" ultimate failure continues
to be a long term certainty. Every short-term failure of the
gold speculators is another notch in the gun handle of the volcano
riders.
But the volcano doesn't care about notches in anyone's handle.
It is not impressed.
The volcano follows its own time line. The "day of reckoning"
it has in store for us is strictly a matter of "economic
physics." It is strictly a function of the amount of pressure
below on the one hand, and the structural weakness of the ground
above. When the former finally overcomes the latter, she will
blow.
Fire and brimstone will surely rain from the sky - and it will
rain on those who have made their camp near their masters, waiting
for the pearls of wisdom and the financial oracles they occasionally
deign to dispense to the masses of their loyal subjects.
If you have any sense, you will not pitch your life savings'
tent anywhere near their sphere of influence.
If you have any sense, you will make camp as far from them as
you can. You will go across the waters, to foreign lands, lands
that are built on the solid bedrock of physical gold, not on
ever-shifting volcano ashes of leveraged paper-instruments. You
will go off the "grid" of fiat-based monetary entanglements.
What you absolutely don't want to do - if you have sense - is
set yourself up to "take advantage" of the blowing
volcano. That puts you right into the camp of the volcano's self-proclaimed
"masters."
Who is a master here, who and what takes advantage of whom in
the end - will soon enough become painfully clear to all.
The best you can hope for is to be able to remove yourself from
the epicenter of this building financial eruption, as far as
you can. You will "profit" if you are simply more or
less unaffected by the violence of the coming outbreak.
Unfortunately, this can be only partially successful. Although
you can effectively use physical gold to insulate your relative
wealth position from the coming onslaught, the accompanying devastation
of the financial environment in which you will live and spend
your wealth is just too far outside of your control.
No one can foretell the topography of the financial landscape
after the eruption. You only know this: that it will be the worse
the longer the volcano is building pressure before it blows -
and everything the volcano riders are now doing to "manage"
the events to come is only adding to that pressure.
Got
gold?
Sep 13, 2004
Alex Wallenwein
Editor, Publisher
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 Alex Wallenwein writes the Euro vs
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