As Soros talks his hedge in Sri Lanka (it might as well be Davos) and Gross acknowledges the new demographic normal in what once was a conspicuous consumption model with no remaining consumption fuel outside of expanding debt in currency terms (long since unrepayable in "post-currency" terms) we watch the continuing effects of gradual systemic decline.
In dollar terms, we could easily see 1075/oz gold again in USD by tomorrow (not a prediction, just a possibility that bears recognition). But this is of no consequence in the larger scheme.
I write now because of this recent tendency to depict China's strategy as desperate or "clueless". It is neither. The adjustment is not so much to magically transform from a producer to a consumer model, but rather to a balanced and harmonic model where each country's resources and expertise are used wisely to balance production and consumption within a larger regional economic system that gradually indemnifies debtor economies to irrelevance.
The 1% have adjusted accordingly. The momentum play now takes place where the 2 to 5% begin their move, and so on.
Some will say that holders of gold are doom and gloomers, awaiting Armageddon. But I say that gold holders are eternal optimists. We do acknowledge that if we take the world back to the stone age, gold will then finally have no value - just as it held no value for prehistoric man. Our optimism precludes this outcome.
We see gold as the light at the end of the paper tunnel, where a new golden future awaits. A future where a new age of globalism exists to replace the failing model of globalism today.
Those who talk of the conspiracy to form a new supranational currency (SDR? please don't make me laugh) have been asleep for decades. All currencies today are global. It is the arbitrage of the strong over the weak that senior wealth exploits. When those advantages are no longer profitable, gold resumes it's "balancing purpose" among the paper markets.
We see a new leader emerging who speaks not of tyranny against all those who fail to pay tribute to the advantages of a dying regime, but rather a world of peace and harmony, where economic freedom begins to thrive again ,and wealth begins it's balance into an equitable system where failure is not rewarded, where fraud is not propped up by more paper debt - but rather where success is rewarded, and nurtured, and prosperity is not just a debt fueled dream for the middle classes, but an economic reality.
No other world will do for our children and grandchildren. No other future is acceptable to holders of gold. Powerful countries and powerful families do still hold it. Gold simply "will not die". The desperation lies in letting it flee to a new era you will fail to be a part of. Is gold so different from paper? The time for honoring paper wealth will soon be at an end.