I think it might be time to buy some gold (and silver).

[Borodog]

I came to the conclusion over the weekend that it is time to acquire some hard currency. This epiphany came after I learned an astonishing fact that I had never known before: gold very nearly spontaneously "remonetized" in 1980.

When the rapid inflation of the 1970s was revealing the "savings" of most Americans to be completely illusory, losing value daily, many people began holding gold as an inflation hedge, a store of value. About a quarter to a third of the US population was doing so; this increased the market price of gold practically exponentially. People began accepting gold in payment of debts, completely ignoring the laws against it.

The IMF then began a systematic dumping of gold onto the market to depress gold prices (ca. 1974), and make it appear that gold was not a good inflation hedge. This worked for a few years, but gold was set to spontaneously remonetize right at the turn of the decade. This was forestalled by massive coordinated gold dumping by central banks that began in 1980, a tactic that has been seen again and again over recent decades, right up to and including late last year. I had known about this (central bank gold dumping) from way back, but never really understood why it was done (this was from pre-libertarian days; I'd totally forgotten it).



The point being; this cannot continue indefinitely. I believe we are poised for a 70s style international collapse of the dollar, a subsequent influx of foreign held dollars into the US, a resulting massive inflation, and a flight from the dollar into gold as an inflation hedge. This could again lead to a spontaneous remonetization of gold; in fact, I believe it will do so; as I believe that market gold prices are radically depressed from their natural market values, and I don't think there is enough gold in all the central banks of the world to dump on the market in the event of the collapse of the dollar to prevent the remonetization of gold.

And here's the kicker: by dumping gold reserves, the central banks are putting the real money back into circulation. If and when the gold-dumping begins anew, driving the price down, buy more.