I have grown tired of the frequent references to outright economic collapse that seems to surface every few months, so I am unimpressed with Hal Turner. Part of the problem is basic perception. Look, if people look at a longer term chart for gold, the performance is pretty impressive for most of this decade. How much excitement is really a factor in the market? I would think almost no attention is going towards gold, except on the bearish side with many commentators calling it a bubble and the usual nonsense from the banana heads. Why? Investment time horizons have come down the same way that overall consumerism has affected our expectations. People want instant gratification. You do not save for a car or a home these days, you run out to the bank and try to get a loan and worry later how you are going to pay for it. That is the consumer model, right or wrong.

Investors suffer from a similar unwillingness to wait for success. If something is not going up each and every day, if you are not getting rich quick, then you discard it and find something else. Gold has done well, but its volatile and the price drops (like the one we are in right this minute) tend to be severe and lend the impression that things are bad and that we are not making any money in the sector. Thats not true, but in a hyperactive instant gratification market, its close enough.

So the concept of a meltdown, economic collapse, etc comes from the same thought process. If we have duress affecting the economy, and things are bad this quarter, then we are on the brink of catostrophy. If a few banks are in trouble, then by extension we will see a banking holiday declared and all banks will fail. If the government has mis-managed the economy, then its just a matter of time until all pensions default, the dollar caves in, and food riots start next tuesday...

I think we ARE in serious trouble, I just dont see it all spinning into anarchy in a hurry. Things take a long time to play, and there are feedback loops and countertrends that tend to slow down a process even in crisis. Look how we all got overly excited and then screwed by the dollar last year, as it looked on the ropes and then came back suddenly to hammer the commodities as a side-effect.

The situation is a slow motion train wreck. I think a dollar decline is inevitable, I think a gold rise to levels most people cannot imagine is going to happen, I think large numbers of banks will fail, and I think hyperinflation is unavoidable. But it will not happen in a matter of weeks or even months. It is a process that unfolds in stages. So that is why I do not worry about having huge stashes of money around my house, or think about buying bread with gold coins in my lifetime.

Next year gold will probably be around $1200 - 1500 and people will be bitching that its not above $2000. Three years ago people complained that gold was having trouble breaking above $500. Thats progress.

cheers!

mike