1 year ago this week

This time last year gold was trading at $1150/oz and all the clever folk said it was a bubble.  FOFOA told us why it wasn’t and a year later we’re at $1400/oz and looking very comfortable indeed at these supposedly “even frothier” levels.  Next year the gold price will go higher, and one of the reasons is because of our debt laden fiat monetary system that is bringing countries to their knees.  The Greeks knew all about this a year ago and 1 year on they’re not really much better off, barring a hefty bailout from their European overlords in a lame attempt to forestall reality.

Another reason for gold’s rise is the deteriorating quality of global fiat currencies.  The dollar went from being backed once upon a time by reasonably sound government debt to being backed by unsound government debt AND toxic mortgage securities and loans to unsound banks.  But wait, before you all point at the US and laugh, the rand is about 75% backed by the US dollar!…so gold prices will keep rising in ALL currencies. 

Meanwhile last December Tuvalu and Friends staged a walkout in Copenhagen in protest that the West wasn’t prepared to fill their begging bowls to the brim….and speaking of the rich giving handouts to the poor only for these funds inevitably to be squandered, we showed that each South African taxpayer is supporting more than 4 unproductive folk in one of the most redistributive tax jurisdictions anywhere in the world.

A year ago Niall Fergusson was the toast of the town and explained why Austrian economics is a big winner.

The Austrian framework also allowed us to make this correct prediction a year ago on why the feared Eskom tariff hikes would not be inflationary in 2010 and why the central bank would cut rates much futher.