In this report I cover the early market action from London on Wednesday, August 29th, 2018. I look briefly at the precious metals, the stock market, the dollar and the bond markets.
Today I cover a subject that goes back to the 1980s when former U.S. Treasury secretary Larry Summers and a colleague from Harvard University wrote a paper about how real interest rates and the gold price are inversely related in a fiat money system. They called this Gibson's Paradox.
Many observes believe that from that theory the former Treasury Secretary Summers and the then at the time Treasury Secretary Robert Rubin used that knowledge to create the strong dollar policy. They did that by having massive amounts of gold leased into the markets in the 1990s in order to keep the price down while the real interest rate kept going lower instead of higher.
I note that this plan seems to have evolved into the fake government statistics that we see today like CPI, GDP and the unemployment rate. My argument is that if CPI really reflected the true rise in the cost of living it would be north of 6% per annum and not 2%. These fake or shadowstats have affected all financial asset prices as investors and traders use these stats and especially CPI to determine bond prices.
My conclusion is that we need to be cautious of the risks of being exposed to financial markets as sooner or later these fake indicators and markets will be exposed.
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People are saying 6 billion $ in the Crypto market are fake, what you say about it sir?
I think crypto has actually more value than fiat.
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If gold is listed on fake paper, (i.e. whats listed doesn't replicate actual gold) why physical gold has value? If there's a SHTF state of affairs the pretend gold can still be control by banks and that they will create additional. Lets face it if $ collapses, you will not be shopping for chickens with silver coins. Nope, when the reset it should be a coin supported valuable, however the banks can hold the new pretend cash. Back to face one.
We'll see if the public will have confidence in the bankers' new paper.
Thank you for citing understandable example(The house near the cliff)
House on the cliff, great analogy. I'll use it on my wife
"Fake markets fur sure mate! An' who's buyin' at record highs?!"-Keptin
https://steemit.com/silver/@joshuaslane/silver-adventures-of-captain-joshua-slane-29au18-silver-bullion-chartwork
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