DarthMaul09 (81.90)

To expect the unexpected shows a thoroughly modern intellect. Oscar Wilde

December 04, 2011 – Comments (5) | RELATED TICKERS: CEF , SLW , CDE

The dark magic of the modern monetary system has led to wars and the potential for famine in areas that have been the recipient of Fed induced inflation.  Now that the world banking system appears at risk we find that many sovereign nations are not so sovereign.  The biggest Currency War of the last century has already begun.  The choice for central planners is to prolong the charade or to admit that their hubris was unwarranted.  Unfortunately, those that will be made to suffer will not be those who were at fault.  The system will be kept alive until disorder prevents even the bankers from controlling the outcome.  For now the mainstream media will try to shield us from any harmful truths that may threaten the facade.

What appears certain is change, an idea as old as The Art of War but still not appreciated by investors who view any downturn as a normal cyclical correction.  Markets are headline driven because central bank and government interventions as measured by currency devaluation and capital controls are what matter.  What is not being appreciated by the mainstream media is what is of real value.

Guessing what will happen next is the current basis for investing (or speculating).  Even if gold and silver have a dramatic rise in dollar terms, it is not inconceivable that windfall profit taxes would limit gains as governments attempt to control key commodity markets prior to the transition to the next currency system.

Eric Sprott's suggestion to silver miners that they hold 25% of their cash position in the physical metal is an interesting idea, especially with currency debasement continuing to support the metals market.  CDE may be the first to consider this idea.  It will be interesting to see the price action of this company if they move ahead with this idea.

If this eventually works for silver producers, then gold producers will likely follow.  Scarcity of precious metals and devalued world currencies should increase the interest in hard money.

"Get ready for the Pan Asian Gold Exchange, scheduled to open in June, 2012 in Kunming City, Yunman Province– the gateway to all of Southeast Asia." - Forbes.