Surging Gold Prices and the American Endgame

By Thomas Naylor

Every time President George W. Bush opens his mouth, the price of gold goes up. When he declared victory in the war in Iraq on the deck of the aircraft carrier Abraham Lincoln on May 1, 2003, the price of gold was $320 per troy ounce. A few months later it was more than $400 per ounce, and by February 2006 a heady $575 per ounce. When the world is going to hell in a hand basket, people invest in gold. Wars, terrorism, recession, high budget deficits, supply shortages, energy price spikes, rampant inflation, and high interest rates all give rise to higher gold prices. The more misery there is, the higher the price of gold.

After being in the doldrums throughout the 1990s while the U.S. economy was booming, the price of gold started to rebound after September 11, 2001, a day which may be remembered as the beginning of the end of the American Empire as we know it today. Amidst a sea of American flags and patriotic hype, our mean-spirited, militaristic government called for unconditional allegiance to national unity, a war against Islam, an impotent homeland security bureaucracy, suppression of civil liberties, rendition of terrorist suspects, citizen surveillance, prisoner abuse and torture, regime change in countries such as Iraq, Iran, and North Korea, and a foreign policy based on full-spectrum dominance and imperial overstretch. With his bellicose talk, preemptive military strikes against Afghanistan and Iraq, massive military spending, and huge tax cuts and budget deficits, President Bush has proven to be the gold market's best friend.

The price of gold is particularly sensitive to energy-price and -supply uncertainty caused by excess demand, storms, earthquakes, fires, strikes, wars, terrorist attacks, and political unrest. Some analysts speculate that if the United States attacks Iran, crude oil prices could reach $200 per barrel and gold prices might top $1,000 per ounce. The effect of the proposed Tehran Oil Trading Bourse on crude oil and gold prices remains a matter of speculation.

The financial establishment, meanwhile, understands full well that an investment in gold is an act of rebellion – a vote of no confidence in the American Empire, the U.S. economy, the dollar, and technofascism. If too many Americans start buying gold, things could really get out of hand. What would Wall Street spin doctors do? They might not be able to spin their way out of economic free fall on Fox News.