The price is dashing back and forth like a crack crazed squirrel.

August 26, 2011 – Say, buddy, you got the gold price? You mean now or in 10 seconds?

The price is dashing back and forth like a crack crazed squirrel. The price shoots up and frenzied traders sell. So the price plunges and frenzied traders buy. It’s insane. But why?

Chairman Bernanke didn’t hand over the reins this morning, but at least he acknowledged that the Fed needs to puzzle over the economic problems a while longer before taking any further action. Wall Street didn’t get even a whiff of another handout and the best Bernanke could do to calm the masses was state that while recovery has been “modest,” no permanent damage has been done to the economy.

Nobody got a warm fuzzy but neither did anybody get a slap upside the head. All we got was a can kicked a few weeks down the road to a special two-day meeting in September. With nothing else to go on the pundits will turn to speculating on what will come out of that meeting, and that can only fuel the volatility.

The NY Times recently gave us a clue to the root of all the craziness with this incredibly moronic tidbit: “The renewed willingness and confidence to spend money we don’t have is vital to the continuing recovery.” Say that to the wino on the corner and he will tell you that you’re nuts. Rarely does one see ‘reductio ad absurdum’ – proof by contradiction – apply so well to a premise. But that is the mentality that got us to where we are today.

In these days of global economics any policy based on the precept of spending more money than one has is necessarily doomed from the start. Consuming more than is produced is the fast road to a third world economy.

Regardless of how wild the market gets, and perhaps because of it, the wise move is still gold coin investing.

Kevin Johnson

Senior Staff Writer –

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