Gold will continue to rise primarily do to the uncertainty and instability of western governments and the complete lack of confidence in the rule of law as demonstrated by the west’s efforts to saddle their citizens with the private losses of the big houses in London and New York, the likely suspension of centuries old property rights in favor of the banks balance sheets and the clear ownership of the political class by investment banks. All of that, and propping up failing institutions fights against the nature of capitalism distorting markets, creating inefficiencies, and it prevents the evolution of what naturally develops behind the collapse of that which dies.

Inflation, other then the speculative commodity bubbles that will trickle through, seems less of a concern for gold, as credit contraction to the tune of 30 bln US is not going to be offset by a few bln of stimulus spending. In fact we in the US would be better off if we stopped pretending we were going to pay back our bond debt and just printed the money we need to eliminated it, from there we could dramatically lower taxes on business, replace income tax with a consumption tax, insure all deposits in US banks regardless of amount, deregulate business, regulate the investment banks, and let whoever fu$ks up go out of business. Debtless, with very low corporate tax rates, no income tax and insured deposits of any amount we would go a long way to bringing business back to our dieing economy. Sounds radical but the patient is dieing form the same disease that killed its ancestors, debt and taxes. It’s time for bold action or to crawl off into the bushes to die.

Hugo already has KRY locked in at todays gold prices as the MOC is indexed to consider variations in the price of gold. Hugo could give a rats ankle about what socialist countries like the US and Euro zone want in terms of stability, he would like nothing more than to see the west wither and die. The strange question is why he would be so enamored with the only real capitalist economy on the planet, China.

I think the idea that the Chinese need to keep a strong dollar until such time as they can mine LC is questionable. I’m sure that the Chinese wouldn’t mind slipping LC into their pocket but I don’t think it is a strategic asset centual to their plans by any means. jmo