August 22, 2011 – In just four weeks gold bullion prices have shot up over 15% while the Dow tumbled by roughly the same amount. That’s a wake-up call if I ever heard one. But what are the average folks doing about it? Mostly they are just sitting around, wringing their hands as they worry about their 401Ks and waiting for words of salvation from Jackson Hole.

I cannot fathom anything more insane than looking to Ben Bernanke for answers. By his own admission he has used all the tools at his disposal, and the net effect of it all is things have gotten much worse. Now the pressure is really on and we should all be very, very afraid.

You know Bernanke is just itching to pump some more cash into the stock market – and his cronies are pleading with him to do so. But it is doubtful that the bubble would hold air the second time around and besides, fool me twice …

Bernanke also can’t lower interest rates any further – zero is about it unless he wants to start paying banks to borrow money. Of course if he wants to get the debt machine fired up again paying folks to go deeper in hock just might work – for a while.

Doing nothing, while probably his best option, wouldn’t be at all well received, so that leaves doing something new. And that’s what scares me.

The Feds astounding ineptitude has us in deep enough trouble already. I shudder to imagine them dredging up some left-field Keynesian theory to pump just enough phony life in the economy to prolong this backslide even a moment longer than necessary.

Of course Bernanke could surprise us all and announce his conversion to the Austrian school. He could tell us all we just have to knuckle down and work our way out of this mess. He could let interest rates rise and the market find its own equilibrium. He could bring reason back to our fiscal policy.

Just don’t count on it. And stop agonizing over those 401Ks – there’s nothing you can do about it anyway. What you can do right now – today – is heed the wake-up call and buy gold bullion.

Daily Updates Archive

Jonathan Monroe

Senior Staff Writer - Gold-Bullion.org