Monday, March 24, 2008

Question for the morning on Gold

In 1964 Bertrand Russell wrote Sixteen Questions on the Warren Report which aimed to point out glaring contradictions in the official narrative, e.g. If, as we are told, Oswald was the lone assassin, where is the issue of national security?

Along that line of pondering contradictions, I wonder, if, as most economic officials tell us, they can't recognize a "bubble" until after the fact, why, then, do they always seem comfortable intervening in the Gold market?

After last week's substantial commodity market declines, the term "bubble" in reference thereto, seems to be more frequently applied.

But, was it a bubble?

My answer (which, to slightly paraphrase Michel de Montaigne, is by way of discourse, and not by way of advice. I should not speak so boldly if it were my due to be believed) is that if the commodity markets were bubbles then I wouldn't want to own any equities or bonds. Conversely, if the economic authorities continue to view equity and bond price levels as "normal," the commodity markets still have a long way to run.

.....more later