The question has been asked “What will it take?” What will it take for Americans to finally rush into gold and silver at a rate of more than 1% of the population? I would also ask, “What will it take for the metals to actually seek their true, unfettered and fair values?” The answer is “not much.” Let me explain.
First, Americans have not embraced the metals like foreigners have because, well, we are “Americans.” The Dollar is our currency and nearly all trade was settled in Dollars until recently. “The Dollar” was money and everything else seemed to “float around it.” We didn’t really have the need to know what Pounds, Euros or Mexican Pesos were trading at unless we traveled. Yes, back in the 1970’s people did begin to awake because of the in your face inflation but that “crisis” faded and things just seemed to go forward after the “little” bumps in the road. Basically we have grown up and lived in a “sheltered” monetary system where we were taught that there was no need for gold.
In the same vein of “because we are Americans” is the fact that until the turn of the century, everything was “controlled.” Crises seemed to be centered in far away countries and wars in far away lands. We came to believe that Alan Greenspan (then Ben Bernanke) would never ever let anything “bad” happen. It was termed the “Greenspan put.” It worked for quite a while and is still working with only intermittent “outages.” It has worked and only for short periods of time has “control” looked like it might slip away but… this may be changing.
Don’t get me wrong, I am not in favor of a rerun of Mad Max but I see no way of it not happening. Just look around you with wide open eyes and mind. We have stretched ourselves militarily in war after war and have bases spanning the 4 corners of the Earth. We have borrowed more than can ever be repaid to pay for guns and butter and now more people collect benefits than pay into the system. We have borrowed so much that mathematically we cannot in the future pay even the funded liabilities much less those that are unfunded. ALL of this borrowing was done, whether you like to admit it or not, to fund the “illusion” that everything is under control! Actually, it was not an “illusion” at all, everything was under control. Too much control! The markets have not been allowed to work for the majority of the last 30-40 years.
These “good” years saw interest rates completely controlled, the stock markets (for the majority of the time) supported, we had cheap (compared to the rest of the world) energy and we could print and borrow as much money as was ever necessary. Who couldn’t like those conditions? What will finally “free” gold and silver from their shackles and finally cause the masses to move will be “loss of control.” Yes I know, I am answering the question WITH the question but this is the reality. It will take the the “loss of control” of the entire financial tragedy/comedy to allow Mother Nature to take over.
Will it be the bond market crumbling and interest rates soaring? The derivatives market? One more nation repatriating their gold and are told “sorry?” Too many standing for delivery in the gold or the tiny silver market? It could be any of these things yes… but when it is over it will be ALL of these things! Anything and everything that has defied logic to this point will become “logical” in their outcomes. I know that answering a question with the same question stated as a statement is not normally very enlightening but in this case it is. The loss of control will occur because there was too much control in the first place and in order to continue control, it must grow exponentially to hide the lack of logic. Either “control” continues in everything, everywhere… or… the loss of control will occur in everything… everywhere! There can be no “loose ends” anywhere for any reason which is now the Achilles heel, there is just too much and the system too big… to control EVERYTHING, EVERYWHERE. And yes this is a mathematical certainty!