It’s not about the bling bling.

Why is an ounce of gold more valuable then a barrel of oil? Although gold’s density is unique, its value per ounce is less then platinum. An ounce of tungsten plated with 24K gold is a painful rip from the upper hip. There maybe tones of tungsten inside Fort Knox, Fed vaults or central bank storage disguised as pure gold.

Will congress enact the authority to audit the Fed’s gold reserve in New York? Whose gold was found underneath the rubble at ground zero? Oil is the energy that runs a global economy. Gold has technological and industrial applications but energy from oils is needed to bring those applications on line.

Gold does not dominate the global manufacturing economy where as production will grind to a holt with out oil. There are other efficient substitutes that can replace most gold application. Gold is a symbol of confidence, security and wealth. It is the global currency of last resort. Gold knows no political, religious or economical boundaries.

Gold has been manipulated by governments but never eliminated from currency. It has past peak even though swap has been created based on future production. Could there be a shortage of gold? Have promises been made that cannot be? With gold linked to the derivatives market price may spike to inconceivable heights.

A possible audit of gold reserve may reveal secret with global implications. The strength of gold exposes the weakness of a carry trade dollar. Central banks have lost the authority and ability to suppress gold resilience and price. Government can only play a catch-up game when it comes to creating paper currency.

If government were a private corporation it would have filed for bankruptcy. Credit creation is another form of increasing money supply coming prior to the government’s printing press. A $600 trillion plus derivatives market is proof point how money is created through the extension of credit into the private sector.

Stimulus and bailout has justified the extension of credit from the FRS to the US government when covering the losses of a private banking system. An undisciplined, unregulated and unmonitored financial sector expanded the money supply beyond global GDP thereby devaluing all world currencies. Hence the exponential rise of gold.

Government is not able to stop an accelerating money supply unless counterparties are willing to take a hair cut.


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