Man, I see stories like this and I really start freaking out. If you want to read a blog that will make you want to kill yourself on a daily basis, Zerohedge (at the link above) is a great one. In any event, there has been a huge run on gold in Europe over the last week. In fact, the run has been so big that many banks are completely out of stock. Note this is a run on actual gold not EFTs which are essentially a paper certificate that says you can get gold if you want to, but if the crap really hits the fan you’ll never see it.

What does this rush to buy gold mean? Maybe nothing, but maybe it means that the trillion dollar bailout in Europe has already failed to accomplish what it was supposed to. The shorting of the Euro continues and the member countries are tied to the Euro and can’t devalue their own currency like we can with the dollar. As much as I would like to snigger at the Europeans as all their smugness gets knocked off their faces as their economy continues to collapse in reality I gain no joy, even with the prospect that the dollar may soon be at parity with the Euro. If the Euro does collapse we could be looking at a whole string of sovereign defaults starting with Greece and Portugal which would almost certainly send us into a true global depression.

History is a great teacher and the lessons we learned from the Great Depression are not necessarily true lessons. In other words, what we think we learned form the Great Depression is not necessarily what actually happened. The first thing to note (and this kind of scares me) is that the Great Depression happened in two stages; there was an initial stage and we started a recovery, then Europe collapsed and basically took the rest of the world down with them into a second depression. Sound familiar? Keynesians would also have us believe that it was Roosevelt’s spending spending and Keynesian economics was what helped us get out of the Depression, at least this is what we were all taught in school. The fact is that this is really up to debate. The Austrian school contends (with good reason I think) that Keynesian economics may have actually dragged the Great Depression on longer, Europe was starting to pull out of the Depression before the United States did. In fact, the only thing that really saved us was WWII.

The documentary below comes from inflation.us and it’s called Meltup. It’s a good watch and will give you some interesting information about the real economic trouble we are in. You might want to have a 5th of bourbon with you as you watch though.


Melt Up