Gold's New Records
Gold closed last week and made new record highs this week against
the Australian dollar, Canadian dollar, Indian rupee, South African
rand and British pound. Here are gold's long-term charts against these
currencies.





Gold did not close this week with a new record high against the euro
or the US dollar. But gold remains in a clear uptrend against both of
these currencies, as we can see from the following long-term charts
(the price of gold in Deutschemarks is used until it was subsumed into
the euro).


Gold was not the only thing making new records this past week. US
government debt is soaring as it borrows money to pay for the bank
bailouts concocted by it in recent weeks.
From September 30, 2007 to the end of this past fiscal year on September 30, 2008, total federal debt grew by $1.0 trillion, from 9,007,653,372,262.48 to $10,024,724,896,912.49, which is an 11.3% annual rate of growth. The federal debt as of October 16, 2008 is now $10,331,139,000,845.92. So in just 16 days since the end of the
last fiscal year, the federal debt has grown by an astounding $331.1
billion, which is a 75.5% annual rate of growth. It has taken just 16
days to borrow one-third of what the government borrowed in all of last
year.
The following chart is from Ed Steer, a regular contributor to "Casey's Daily Resource Plus" published by Casey Research (https://www.caseyresearch.com/). This chart of weekly T-bill issuance visually portrays this accelerated growth of federal debt.

The above chart shows T-bills only, and therefore excludes the
growth of other federal debt instruments. Also, this $10.3 trillion
debt total I refer to above excludes the federal government's unfunded
liabilities. When these are added, the total obligations of the federal
government are $110 trillion, or at least that's what they were estimated to be last May by Dallas Federal Reserve president Richard Fisher. The federal
government's unfunded liabilities, and therefore its total obligations,
have obviously grown further since then, and are now some unknown
number greater than $110 trillion.
In short, the US federal government is staggering under the world's
heaviest debt load. To meet its obligations and promises, the Federal
Reserve will continue to create "unlimited" amounts of dollars.
That word - "unlimited" - is getting used frequently in the media
these days. Bloomberg reported on October 13th that "policy makers
offered banks unlimited dollar funding." The Wall Street Journal reported on October 14th that "The U.S. Federal Reserve agreed to
provide unlimited dollars to three major European central banks." Then
on October 15th Japan jumped into this dollar creation frenzy too, and
according to Bloomberg: "The Bank of Japan said it will offer lenders
as many dollars as they want." Bloomberg went on to say that dollars
will be provided at fixed interest rates for an "unlimited amount",
quoting from the actual BoJ announcement.
At this time of "unlimited" dollar creation we need to take to heart
the words of Warren Buffett's father, Howard Buffett, while serving as
a Congressman from Omaha. In a now famous speech in 1947, Rep. Howard
Buffett said: "When the people's right to restrain public spending by
demanding gold coin was taken away from them, the automatic flow of
strength from the grass-roots to enforce economy in Washington was
disconnected...The gold standard acted as a silent watchdog to prevent
unlimited public spending."
https://www.financialsense.com/editorials/turk/2008/0922.html
The gold standard is long gone so it no longer acts as a "silent
watchdog to prevent unlimited public spending". Because it is no longer
prevented, unlimited public spending is what we are now getting. In
addition to the countless ways the federal government spends - or
wastes, as many would no doubt add - the dollars flowing through its
accounts, it is now spending unlimited dollars to bail out banks
worldwide, a reality which I think makes clear the dollar's bleak
future.
To achieve this unlimited public spending, central banks are
creating an unlimited amount of dollars, which will in time mean that
there is no limit as to how high the gold price will reach. The new
record high in the gold price against the currencies mentioned above
will soon be joined by new record highs in gold against the US dollar,
euro and every other national currency around the globe.
While the gold standard - what Rep. Buffett called a "silent
watchdog" - is gone, gold itself is a watchdog too, and not a silent
one. Gold cannot "prevent unlimited public spending" like the gold
standard, but a rising gold price - like a barking dog - can warn of
danger.
For several years the Gold Anti-Trust Action Committee (www.gata.org)
has diligently explained why and how central bankers under the
direction of the US government - the henchmen of the nefarious 'gold
cartel' - have been capping the gold price. Their solitary aim is to
silence the gold "watchdog", in the hope of making people unaware of
the danger of holding dollars. But the watchdog is now barking in many
countries as the gold price reaches new records against those
currencies.
Importantly, the debasement of the dollar is becoming so profound as
central banks create "unlimited" amounts, the gold cartel will no
longer be able to stop the watchdog from barking by capping the gold
price. I expect new record highs in gold against the dollar and the
euro by the end of this year.

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Published by GoldMoney
Copyright © 2008. All rights reserved.
Edited by James Turk, alert@goldmoney.com