Posted by AzBlueMeanie:
Tea-Publicans in the Arizona legislature enacted legislation that would declare privately minted gold
and silver coins legal tender in Arizona. A version of the bill has passed both the Senate (Senate Engrossed version) and the House (House Engrossed version) and is awaiting concurrence in the Senate, before going to the Governor.
Tea-Publican legislators claimed that the global economy is on the precipice of
financial ruin and the U.S. dollar could soon be worth less than the
paper used to make it.
I hate to break it to you boys and girls, but have you been paying attention to the commodities market? The Price of Gold Is Crashing. Here's Why – Bloomberg Businessweek:
A chart of the crashing price of gold
looks like a wedding ring rolling off a table. Late this morning, gold
was trading at $1,378 an ounce, which is down 8 percent from the Friday
close and 12 percent from April 11.
Why is gold plunging? The most
important factor is that global inflation is falling, reducing gold’s
value as a hedge against rising prices. Gold bugs who were betting on an
outburst of inflation are scrambling to reverse their bets and exit
their gold positions at any price.
For consumers struggling to
make ends meet, it may seem hard to believe that inflation is falling.
But the evidence is clear from JPMorgan Chase’s (JPM)
global consumer price index, which covers more than 30 countries that
collectively represent more than 90 percent of world economic output.
According to the JPMorgan index, global inflation peaked at 4 percent in
2011 and has fallen steadily since. Global prices in February were up
only about 2.5 percent from a year earlier, the bank’s index says.
* * *
The headline on JPMorgan’s report: “The slide in global inflation may not be over.”
* * *
Last week Goldman Sachs (GS) warned that the retreat in gold was accelerating after the longest rally in nine decades.
“Anybody who did some buying before this big drop is probably in some pain,”
Donald Selkin, who helps manage about $3 billion of assets as chief
market strategist at National Securities Corp. in New York, told
Bloomberg News. “The perception is that gold is not really needed as a
safe haven. People are looking at the stock market, and they’re stunned,
and there’s no inflation. So people are saying, ‘What do we need gold
for?’”
The Birthers-Birchers-Secessionists of the Tea-Publican Party are just looking for a way to unload their gold while living out their paranoid end-times apocalyptic fantasies.
Paul Krugman posts at his blog, Gold Does Not Glitter:
So, the slide in gold has turned into a rout. As Joe Weisenthal says, this should be seen as really good news,
because it offers strong evidence that the goldbug/inflationista view
of the world — which says that we need to stop all efforts at monetary
and fiscal stimulus lest we turn into Weimar — is, in fact, all wrong.
But Joe is, I think, deluding himself if he imagines that this will
make any difference. After all, the inflationista view of the world has
been repeatedly, devastatingly wrong on many fronts — interest rates,
inflation, the effects of austerity. Has anyone other than Narayana Kocherlakota (who deserves big props for intellectual flexibility) actually changed his or her mind in response?
In fact, by and large the goldbug response to each failed prediction
has been to claim that evil government officials are hiding the truth.
Interest rates are low? That’s because the Fed is suppressing them. How
can it do that, year after year, without causing runaway inflation? Oh,
actually we have runaway inflation, but the BLS is faking the numbers
(and independent measures, like the Billion Prices Index, are part of the plot).
Sure enough, the response of many goldbugs to the latest events has been to cry conspiracy.
Maybe, just maybe, the gold crash will finally bring intellectual capitulation. But I wouldn’t bet on it.
Ah yes, like all good conspiracy theorists, they just create another conspiracy theory to explain away the failure of their earlier conspiracy theory.. . . because it's all a conspiracy you know.