Bitcoin & Now Gold Are Signalling That Our Society Is On Life Support

I've noticed something about myself. I've met North Korea's latest H-bomb test, something that deserves concern and discussion, with near indifference. Why is that? Could it be that it's nothing new? Maybe it's a boy who cried wolf scenario. Maybe it's that social inequity now seems like a much bigger problem that war on the peninsula; something that was mentioned by David Robertson on the the latest X22 Report Spotlight interview.

One thing that hasn't gone unnoticed to those "in the community" is gold's recent rise to breach and hold above 1,300USD. I yawned at the breach, having seen this kind of thing before. I'd expected it to be smacked down again by the criminal cabal, but I was wrong. At the time of writing, it's at $1,334.50 US following both the shocking jobs report out of the US last week (156,000 new jobs vs. 180,000 expected and a sneaky downward revision to July) and the NK tensions yesterday. It jumped $15 at the open this morning on that alone. Incedentally, as a true 24/7 market, bitcoin is a far better market judge as it allows for immediate feedback.

A really interesting article posted today (not written by me) speaks to the context of a degrading social cohesion that gold may finally be reflecting. I encourage you to read the article as it goes into more detail but essentially it helps to explain why we're all feeling that life is becoming more and more difficult despite working harder and harder for fiat pay. Have you noticed that at all? Have you noticed the intense focus on statues and peripheral issues in the US which is now being adopted in Australia; the vandalisation of Captain Cook's statue being one example.

I'll borrow a chart from the article sourced from the US Census Bureau along with an except that makes this point articulately

It’s probably ‘coincidence’ but remember when looking at the first chart that we left the discipline of the gold standard in 1973… Since then governments could create fiat money out of thin air through debt…

You can see it starts to really diverge from around 1980 and the graph below compares 1980 wealth growth (as a percentage) across the percentile range of income. It is reasonably weighted with lower incomes gaining more as a percentage than the top earners (remembering a higher percentage of a smaller number is still a small number). You then look at 2014 where the vast majority of growth is in that very top 1%. These are the people who hold the majority of the financial assets and jobs that have been inflated by the expansion of debt. The GFC saw ‘mums and dads’ try to enjoy this through getting subprime loans, growing house values, and redrawing off the same subprime loans. It didn’t end too well for them but Wall Street seemed to come out just fine thanks very much….

In my own career, the last three jobs I've had have all come with a lower remuneration than the last. That's just a dollar value comparison without the compounding factor of inflation. This is hence a very identifiable phenomenon.

I feel that we're seeing growing civil unrest. The migrant crisis is now old news but the increasing public uprising in the States and the income inequality that is now pervasive, I think, speaks to a fundamental deterioration of the West. The article I referenced above does a great example of concluding so I'll finish with that. Thanks so much for your readership.

Please don’t underestimate the importance of this phenomenon. Credit cycles end badly not just because the debt ends up too burdensome for the weak underlying economy, but the social divide and ensuing revolt make it unsustainable too. Brexit, Trump, etc are but tiny examples of what happens when the 90% voice their dismay. Suppressing rates for longer and throwing more debt to fix it, as will be the result of Friday night’s jobs report, will only make it worse… ironically for the very reason the report was so bad. The gold price can see what’s coming….