2...Globalization Trap and Signs of Crack in the Foundation of the Scheme (March 14, 2006) # 2
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Another warning sign of the beginning of the demise of the current globalization scheme is the movement of the price of gold. For a long time gold's movement is more or less synchronized with the movement of Euro, or inversely correlated to the value of Dollar vs. Euro. However, Euro has started to weaken against Dollar from the early part of 2005 due to the steadily rising US interest rates, whereas gold price started to rise steadily from the summer of 2005, and eventually caught fire in November of 2005. Gold is known as the monetary metal that hedges against inflation and does not yield any interest. The rapid rise of the price of gold at the face of a strong Dollar and steadily rising interest rates that are assuring a calm inflation environment in the foreseeable future deserves our attention. The unusual behavior of gold price is due to the market apprehension about the sustainability of the current monstrous globalization scheme, cracking under its own weight of run away trade imbalance. Ironically, as the necessity of higher interest rates increases in order to support the dollar from collapse, more apprehensive the market will become and higher the price of gold will go. Thus the price of gold can be used as a market assessment of the final fate of Dollar and the globalization scheme. At the eve of the final collapse of Dollar and the demise of the current globalization scheme, the price of gold will be sure to skyrocket to an unprecedented level.
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