范曉舵
今互聯網已經滲入到人們生活的各個方面，它給我們的生活帶來了極大的方便，使人與人的交流變得簡捷迅速，但同時也帶來了新的問題，那就是互聯網上癮（簡稱“網癮”）已經成了一種越來越嚴重的社會現象。最近，中國社會科學院的一項研究表明，至少有3300萬中國互聯網用戶可被列為有網癮。
讀者可能會問：我每天因工作需要使用互聯網好幾個小時，我算有網癮嗎？我的孩子放學一回家就把自己關在房間裡上網，他是否有網癮？
從心理學的角度來看，網癮是一種心理沖動控制障礙。如果有以下這些症狀的話，那麼可能就有網癮：心裡總是想著互聯網（比如，我上一次上網都幹了些什麼，我下一次什麼時候能上網）；上網的次數越來越頻繁，時間越來越長；因上網的時間過多而危害到了工作、學習以及重要的人際關系；當試圖減少或停止上網時，感覺焦躁不安、情緒低落；用上網作為逃避現實問題或解除負面情緒（如無助、內疚、焦慮和抑鬱）的方式。
可以看出，如果你是因工作需要而使用互聯網好幾個小時，還不能算有網癮。下面我們來描述一個實際案例，希望能幫助大家更好的理解網癮。
傑米是一個16歲的高中生，他每周大約有70個小時都坐在電腦前，其中40多個小時在互聯網上。傑米通常在下午兩點至四點之間上網，要到凌晨一點至五點才退出。他每天花數小時的時間參與網上對於電視節目“星球奇遇記”的討論，還形容自己是“科幻狂”。傑米聲稱互聯網是他生命中最重要的事情，即使在沒有上網的時候也老想著它。他認為互聯網可以改變自己的心情：要麼讓他平靜下來，要麼讓他興奮起來。他也曾試圖減少上網的時間或放棄上網，但網絡空間的誘惑力實在太大，難以抵制。傑米聲稱他在網上聊天室“認識很多人”，但在現實生活中他卻沒有朋友，也沒有興趣交朋友。如果你與傑米的情況類似，那麼你就可能有網癮，需要尋求專業幫助。
網癮會導致一系列具體的問題，這些問題往往是網癮患者來醫院尋求幫助的直接原因。
第一是網癮使婚姻關系受到嚴重幹擾，最常見的例子就是網上戀情。網上戀情是指通過互聯網建立起來的一種兩性間的浪漫關系，這種關系的維持主要通過網上聊天室、網上互動遊戲以及電子郵件來維持，但不一定有性關系。網戀者通常是用減少在現實生活中與親人交往的時間，以換取更多的時間坐在電腦前與“情人”相處，他們每天24小時，每周七天隨時“會面”，從而創造了一個網上戀情的溫床。
第二是網癮使學業荒廢。由於過度使用互聯網，很多學生學習成績下降。他們常常光顧與學業無關的網站，在聊天室裡瞎吹胡侃，與互聯網筆友交談，在網上玩互動遊戲，導致荒廢了學業。
第三是網癮使工作效率降低。現代企業運行的各個方面幾乎都離不開連接互聯網的信息管理系統，因此員工濫用互聯網甚至發展成網癮已變成了一種潛在的流行病。例如，一個大公司對其內部互聯網使用的跟蹤調查發現，只有23％的互聯網使用與公司業務相關。這一類的網癮患者一般會由公司推薦到醫院，強制性接受治療。
值得一提的是，隨著網絡技術的發展以及智能型手機和便攜式電腦的普及，網癮的表現形式也發生了一些有趣的變化，從傳統的台式電腦使用擴散到了手機和微型電腦的使用。
比如，黑莓手機（blackberry）因其出色的保密功能受到許多政界與商界人士的青睞，有些人因此染上了“黑莓癮”。常見的症狀包括：頻繁查看電子郵箱和發短訊；在不適當的時間接聽電話和留言；手機晝夜不離身，唯恐錯過重要信息。就連美國總統奧巴馬在就任總統之前也是一名“黑莓癮君子”。奧巴馬在當選總統之後幕僚們勸告他：堂堂一個大國總統，在公眾面前埋頭於黑莓，實在不雅觀。奧巴馬最終接受了勸告，在經歷了一番痛苦的不適應期後，成功戒掉了“黑莓癮”。
那麼，該如何戒掉網癮呢？治療網癮的重點應該是控制使用，而不是禁止使用，這一點與戒毒的治療不一樣，網癮的治療主要依靠認知療法和行為療法。
在認知療法方面，使用提醒卡可能會很有幫助。比如，讓患者列出網癮帶來的五大壞處以及減少上網帶來的五大好處，然後讓患者將這個清單寫在一個小卡片上，並把小卡片放在衣服口袋裡或錢包裡。每當患者想使用互聯網時，就讓他們將小卡片拿出來提醒自己，從而使他們去從事更有創造性、更健康的活動。
行為療法的一個主要策略是重新組織和安排患者的上網時間。比如，在與原來相反的時間使用互聯網，這樣做的目的是讓患者打亂他們的常規，重新建立新的時間模式，以此來改變上網的習慣。使用外部提醒工具也是一個有效的方法。比如，患者在上網時先確定停止上網的時間，然後設置報警裝置並把它放在電腦附近，警報一響，就停止上網。這要求患者一定要明確限制上網的小時數，並把上網的時間段寫在日歷上。除此之外，患者還應該遵循“少吃多餐”的原則，即每次上網的時間短一點，次數可以多一些。這種有計劃有安排的互聯網使用可以讓患者覺得是自己掌握控制權，而不是互聯網掌握控制權。
當然，還有些網癮患者可能並發有其他心理疾病，如抑鬱症或焦慮症，這些疾病也需要得到及時的診斷和治療。必要的話，可能還需要藥物治療。
（本文作者范曉舵，醫學博士，美國哈佛大學醫學院以及馬薩諸塞州總醫院臨床精神科醫生，主持亞裔心理健康門診。本專欄的目的是為讀者提供一般性心理健康信息，其內容不應該被用作具體診斷或治療的依據。您可以通過info@healthy-mind-chinese.com或www.healthymind-chinese.com與作者聯系。文中所述僅代表他的觀點。）
2011年11月18日星期五
Brink's Loses Nearly 3/4 Million Ounces of PHYZZ Monday
With the Veteran's Day holiday over, massive volatility returned to COMEX silver warehouse vaults Monday, with several large withdrawals to report.
COMEX WAREHOUSE SILVER INVENTORY UPDATE 11/15/11
*Brink's had a large withdrawal of 755,762 ounces out of eligible vaults
*Delaware received a deposit of 75,628 ounces into eligible vaults
*No Changes for HSBC or JP Morgan
*Scotia Mocatta had a withdrawal of 81,000 ounces from eligible vaults
*TOTAL COMEX REGISTERED SILVER remained unchanged at 32,086,057 ounces
*TOTAL COMEX ELIGIBLE SILVER declined a net 761,134 ounces to 75,015,049 ounces
*TOTAL COMEX SILVER INVENTORIES declined to 107,101,106 ounces
COMEX WAREHOUSE SILVER INVENTORY UPDATE 11/15/11
*Brink's had a large withdrawal of 755,762 ounces out of eligible vaults
*Delaware received a deposit of 75,628 ounces into eligible vaults
*No Changes for HSBC or JP Morgan
*Scotia Mocatta had a withdrawal of 81,000 ounces from eligible vaults
*TOTAL COMEX REGISTERED SILVER remained unchanged at 32,086,057 ounces
*TOTAL COMEX ELIGIBLE SILVER declined a net 761,134 ounces to 75,015,049 ounces
*TOTAL COMEX SILVER INVENTORIES declined to 107,101,106 ounces
2011年11月17日星期四
麥嘉華預警：中國市場遲早崩盤 不願加碼 房市率先泡沫
素有「末日博士」之稱的國際經濟投資分析大師麥嘉華今(16)日表示，世界經濟力量正快速由西方轉移自東方，中國無疑是即將崛起最重要大國，不過他悲觀認為，「中國經濟恐將崩潰」，尤其房市將率先泡沫。
麥嘉華明確表示，「不願加碼投資中國市場」，更認為中國政府可能學習美國印鈔票模式擺脫經濟發展困境，但中國經濟趨緩是事實，也許3個月、也許3年，但中國經濟崩潰總有一天將發生。
麥嘉華指出，中國經濟現前非常脆弱，面臨金融信用泡沫壓力，同時中國不動產交易量持續下降、建商開始降價求售，中國房地產股價走跌，來到2008年10月低點，雖可能如中國經濟學家所稱，僅是中期房市修正，但也可能成為中國經濟崩潰的引爆彈。
麥嘉華進一步指出，相對於美國商品及服務業軟性消費面占GDP比重高達7成，不需高度使用原物料發展經濟，中國工業生產對原物料需求太大，若中國經濟真的崩潰，將連動全球原料生產大國經濟大幅崩落，全球經濟將成一惡性循環。
另外，麥嘉華說，中國經濟崛起也為政治角力戰產生後遺症，中國需要原物料勢必確保來自中東的石油供給，但中國周圍皆有美國軍事基地監視，中國為確保中東石油可順利運達中國北方港口，在政治上與巴基斯坦合作以對抗美國及印度的包夾，也因此，未來中東地區發生動亂的機率將持續增加，成為全世界最大的火藥庫。
麥嘉華明確表示，「不願加碼投資中國市場」，更認為中國政府可能學習美國印鈔票模式擺脫經濟發展困境，但中國經濟趨緩是事實，也許3個月、也許3年，但中國經濟崩潰總有一天將發生。
麥嘉華指出，中國經濟現前非常脆弱，面臨金融信用泡沫壓力，同時中國不動產交易量持續下降、建商開始降價求售，中國房地產股價走跌，來到2008年10月低點，雖可能如中國經濟學家所稱，僅是中期房市修正，但也可能成為中國經濟崩潰的引爆彈。
麥嘉華進一步指出，相對於美國商品及服務業軟性消費面占GDP比重高達7成，不需高度使用原物料發展經濟，中國工業生產對原物料需求太大，若中國經濟真的崩潰，將連動全球原料生產大國經濟大幅崩落，全球經濟將成一惡性循環。
另外，麥嘉華說，中國經濟崛起也為政治角力戰產生後遺症，中國需要原物料勢必確保來自中東的石油供給，但中國周圍皆有美國軍事基地監視，中國為確保中東石油可順利運達中國北方港口，在政治上與巴基斯坦合作以對抗美國及印度的包夾，也因此，未來中東地區發生動亂的機率將持續增加，成為全世界最大的火藥庫。
A scary prediction for the collapse of paper money
http://www.theglobeandmail.com/report-on-business/commentary/neil-reynolds/a-scary-prediction-for-the-collapse-of-paper-money/article2237056/
Mr. Schlichter argues that we are only part of the way through the market meltdown – and that the worst is still to come. How much worse? Considerably worse, he says, than the Great depression.
OTTAWA— From Wednesday's Globe and Mail
Published
What should U.S. Federal Reserve chairman Ben Bernanke do next? London-based economist Detlev Schlichter says, succinctly: “Abdicate.”What should U.S. President Barack Obama do next? Mr. Schlichter says, succinctly: “Abdicate.” With Mr. Schlichter, you aren’t left with much doubt about his position. He says the world’s major currencies are destined to crash. “The dollar, the euro and the yen are locked in a race to the bottom,” he writes on his website, papermoneycollapse.com. The only question is which one crashes first.
Mr. Schlichter argues that we are only part of the way through the market meltdown – and that the worst is still to come. How much worse? Considerably worse, he says, than the Great depression.
2011年11月16日星期三
歐債危機愈陷愈深
上周四恒生指數大跌1,050點，內地上證綜合指數也收在2,500點以下。首先要談的當然是希臘總理帕潘德里歐提出就歐盟拯救方案進行全民公投，令環球金融市場處於極大的壓力之下，戲劇性的結局是帕潘德里歐在很短時間內收回全民公投的建議。
意大利總理貝盧斯科尼即將下台，歐洲不穩定的局勢持續，剛上任的歐洲央行行長德拉吉出乎意料的減息0.25%，將利率下降到金融海嘯時的1.25% 。老實說，歐洲減息的影響力非常有限，意大利十年期的債券孳息率仍然企於7%以上，投資者對歐洲債券市場抱有極大的戒心。歐洲央行減息的目的只有一個，就是告訴大家它會維持市場的穩定性。我對歐洲經濟及歐債危機的前景絕不看好，認為歐元在1.38的水平是偏高的，建議減持或沽空，目標是年底前跌至1.30以下。
除了歐洲央行減息外，澳洲儲備銀行亦將利率調低0.25%至4.5%。澳洲的經濟與中國和世界商品市場息息相關，雖然內地最近的GDP增長仍然 高於9%，但全球經濟下行的走勢不可改變，內地也不例外。早前澳洲的本地消費和樓市已露疲態，減息是遲早要走的一步，澳元將會再次下試一算的心理關口。
美國聯儲局亦舉行了議息會議， 結果是利率維持不變，也沒有QE3。主席伯南克在會後聲明中提到經濟前景變得悲觀，但強調聯儲局會推出更多措施來刺激經濟，包括購買按揭抵押債券 (MBS)。其實，聯儲局唯一可做的事情便是推出更大規模的量化寛鬆貨幣政策，即QE3，其它如購買MBS或扭曲操作(Operation Twist)皆是花招，因為不會大量增加貨幣供應。再者，美國的任何政策只會為美國利益服務，這張皇牌肯定留中不發，留待明年總統大選年才出手。
現時10年期美債的息率又從2.3%降至2%的水平，證明了在環球經濟走低和歐洲債務危機的影響下，資金仍然選擇美元和美債為避風港，可以說歐洲愈亂，美元及美債愈得益，這比起推出甚麼QE3來得不費吹灰之力。
最近數據顯示內地4大銀行的新增貸款有 所增加，人民銀行發行票據回收市場流動資金的數額也減少了，這些跡象預示貨幣政策轉向寛鬆的一面。如果這個趨勢得以確認，那麼內地及香港的股市可看高一 線。因為人民銀行的貨幣政策從緊是要對應通賬和歐美熱錢的衝擊，內地的CPI降至5.5%及PPI降至5%，都為人行的貨幣政策提供了放鬆的空間。
香港的樓市也是近期的熱門話題，媒體報導索羅斯旗下的基金經理不斷約見本地的發展商、代理及行內分析員，似有大動作。在上週末，我接了多間地產 代理游說看新樓盤的電話，這現象說明了買家難找，地產代理才會翻查陳年的舊記錄去找可能的買家。內地的樓市也持續降溫，先有中原地產大規模關閉深圳的分行 網絡，再有大型地產發展商退地。
以上的消息無損內房、內銀及香港地產的板塊在近期作出反彈，大家宜見好即收，歐洲的局勢仍然不穩定，市況升跌無常，還是以注碼控制風險。
http://columns.etnet.com.hk
意大利總理貝盧斯科尼即將下台，歐洲不穩定的局勢持續，剛上任的歐洲央行行長德拉吉出乎意料的減息0.25%，將利率下降到金融海嘯時的1.25% 。老實說，歐洲減息的影響力非常有限，意大利十年期的債券孳息率仍然企於7%以上，投資者對歐洲債券市場抱有極大的戒心。歐洲央行減息的目的只有一個，就是告訴大家它會維持市場的穩定性。我對歐洲經濟及歐債危機的前景絕不看好，認為歐元在1.38的水平是偏高的，建議減持或沽空，目標是年底前跌至1.30以下。
除了歐洲央行減息外，澳洲儲備銀行亦將利率調低0.25%至4.5%。澳洲的經濟與中國和世界商品市場息息相關，雖然內地最近的GDP增長仍然 高於9%，但全球經濟下行的走勢不可改變，內地也不例外。早前澳洲的本地消費和樓市已露疲態，減息是遲早要走的一步，澳元將會再次下試一算的心理關口。
美國聯儲局亦舉行了議息會議， 結果是利率維持不變，也沒有QE3。主席伯南克在會後聲明中提到經濟前景變得悲觀，但強調聯儲局會推出更多措施來刺激經濟，包括購買按揭抵押債券 (MBS)。其實，聯儲局唯一可做的事情便是推出更大規模的量化寛鬆貨幣政策，即QE3，其它如購買MBS或扭曲操作(Operation Twist)皆是花招，因為不會大量增加貨幣供應。再者，美國的任何政策只會為美國利益服務，這張皇牌肯定留中不發，留待明年總統大選年才出手。
現時10年期美債的息率又從2.3%降至2%的水平，證明了在環球經濟走低和歐洲債務危機的影響下，資金仍然選擇美元和美債為避風港，可以說歐洲愈亂，美元及美債愈得益，這比起推出甚麼QE3來得不費吹灰之力。
最近數據顯示內地4大銀行的新增貸款有 所增加，人民銀行發行票據回收市場流動資金的數額也減少了，這些跡象預示貨幣政策轉向寛鬆的一面。如果這個趨勢得以確認，那麼內地及香港的股市可看高一 線。因為人民銀行的貨幣政策從緊是要對應通賬和歐美熱錢的衝擊，內地的CPI降至5.5%及PPI降至5%，都為人行的貨幣政策提供了放鬆的空間。
香港的樓市也是近期的熱門話題，媒體報導索羅斯旗下的基金經理不斷約見本地的發展商、代理及行內分析員，似有大動作。在上週末，我接了多間地產 代理游說看新樓盤的電話，這現象說明了買家難找，地產代理才會翻查陳年的舊記錄去找可能的買家。內地的樓市也持續降溫，先有中原地產大規模關閉深圳的分行 網絡，再有大型地產發展商退地。
以上的消息無損內房、內銀及香港地產的板塊在近期作出反彈，大家宜見好即收，歐洲的局勢仍然不穩定，市況升跌無常，還是以注碼控制風險。
http://columns.etnet.com.hk
Keynote Speech At Sydney Gold Symposium 14-15 November 2011 By Alf Field
http://www.jsmineset.com/
by Jim Sinclair in the category Alf Field
My Dear Friends,
You know I have great respect for Alf Fields both as a master of his methods (there are very few) but also for having a mercantile sense which cannot be taught. You know of his accuracy during the two major bull markets for gold.
I fully agree with Alf on the potential of the next move. I feel confident the accordion chop that Kenny points out did complete itself on the day of the longest predicted period of consolidation.
I see gold headed into the $2000, but only as another steep on its way to Alf’s number.
Respectfully,
Jim
The Skinny:
"Once this correction has been completed, Intermediate Wave III of Major THREE will be underway. This should be the largest and strongest wave in the entire gold bull market. The target for this wave should be around $4,500 with only two 13% corrections on the way."
KEYNOTE SPEECH AT SYDNEY GOLD SYMPOSIUM 14-15 NOVEMBER 2011
BY ALF FIELD
THE MOSES PRINCIPLE
The Moses Principle is an irreverent theory based on the question of why Moses spent 40 years traversing the Sinai desert before leading the Israelites to the “promised land”.
God was powerful enough to send numerous plagues to devastate the Egyptian economy until Pharaoh allowed the Israelites to leave Egypt. Later God caused the Red Sea to part so that the Israelites crossed on a dry sea bed. When the pursuing Egyptian army and their chariots were in the sea bed, the waters crashed back and drowned them.
If God was powerful enough to do all of these things, why not allow the Israelites to go straight to the “promised land”? Why did Moses spend 40 years traversing the barren desert before leading the Israelites to the “promised land”? Here is the irreverent theory. Every Israelite over middle age when they left Egypt probably died during the ensuing 40 years. The younger people were born in the desert or spent their adult lives in the desert. After 40 years the life experience of the survivors consisted of living in the desert. When they finally got to the “promised land” it appeared to be “flowing with milk and honey” when compared to their prior desert existence.
A total generational change had taken place so that the survivors had no knowledge of anything other than the desert. There was nobody who could remember what Egypt was like. The Moses Principle recognizes the fact that over any 40 year period, a generational change takes place.
What has this got to do with gold? Recently we passed the 40th anniversary of 15 August 1971, the date when the last link between currencies and gold was ended by President Nixon. This launched an era of floating “I owe you nothing” currencies. Money was what any government deemed it to be, generally something that the government could create in unlimited quantities. That system, plus the fractional reserve banking system, launched an era of ever increasing debt and credit. It was an era where debt was desirable and money lost its purchasing power.
Everyone in this room has spent their adult lives living under this system. Most have had no exposure to monetary history or what money really is. The new “Moses” generation will have to re-learn the lessons of monetary history before the world can enter a new era of sound money and stable economic growth. The impact of this generational change will be discussed later.
The 15 August 1971 was an important date for me personally. I had grown up in South Africa and in early 1970 started a funds management company with a good friend of mine. The first 18 months was a struggle as we were buffeted by a vicious bear market. By August 1971 our clients were largely in cash awaiting the end of the bear market or an inspirational idea.
That inspirational idea came on 15 August 1971 when I heard that President Nixon had decreed that the USA would no longer exchange US dollars held by foreign governments for gold at $35 per ounce. Gold had limited downside but appeared to have good potential for substantial gain. Gold shares were deeply depressed after 37 years of a fixed $35 gold price, another “Moses Principle” period. We bought gold shares aggressively. This proved to be an astute move and our funds management business was launched on a successful path.
Having locked ourselves into a big position in gold shares, we needed to have some idea of how the gold price might perform and how high it might rise. We ran into the conundrum that has confounded fundamental analysts since 1971. How do you value something that has no utility value, no earnings or net asset value, does not spoil or corrode and is not used up?
Other commodities such as copper, soya beans and corn etc., are priced using a combination of demand, supply and stocks. If demand exceeds supply, stocks diminish, shortages develop, prices rise and new production comes on stream. Eventually supply exceeds demand, stocks build up, prices decline and marginal producers go out of business. The cycle then repeats itself. Other commodities are produced for consumption while gold is accumulated.
Consequently large stocks of gold exist in official hands as central bank reserves. There are also large stocks of gold in private ownership, in vaults around the world, in homes, buried in gardens, in coins and gold jewelry. New mine production of gold is tiny compared to available stocks. In 1971 official holdings of gold were about 37,000t. Cumulative world gold production throughout history up to 1971 was estimated to be about 90,000t, so investors/hoarders must have owned at least as much as the official holdings. In 1971 world gold production was a mere 1,450t, or less than 2% of the estimated amount of gold held in the world at that time.
The fundamental conclusion was that the owners of the large stocks of gold would determine the future of the gold price. If they became net sellers, the gold price would decline. If they became net buyers, the gold price would rise. There were reasons to believe that they would be net buyers. The world had been launched into an untried experiment where all countries were subject to Government fiat currencies and, in addition, there was a latent group of buyers in the wings. Americans had been prevented by law from holding gold since 1933. With the collapse of the gold exchange standard on 15 August 1971, there was no reason for this prohibition to continue. On 31 December 1974 (another Moses generation period from 1933) the largest and wealthiest nation on Earth allowed its citizens to buy and own gold.
The obvious conclusion was that it was necessary to resort to technical analysis to find a way to predict movements in the gold price. I experimented with a variety of technical systems and then got lucky. I discovered that the Elliott Wave Theory (EW) gave superb results in predicting the gold price. I couldn’t get the same great results using EW in other commodities or markets. EW is a complicated system with many difficult rules, but I will try and explain it in simple terms.
The technique is to concentrate on the corrections. In terms of EW, the sequence in a bull market is as follows. The market rises, has a 4% correction, rises, has a 4% correction and rises again. At this point the next correction jumps from 4% to a larger degree of magnitude, say 8%. The market then repeats the sequence. A rise, a 4% correction, a rise, 4% correction, a rise and another 8% correction. When the market is eventually due a third 8% correction, the magnitude of that correction jumps from 8% to 16%. This sequence is repeated until two 16% corrections have occurred when the size of the next big correction jumps to 32%.
The beauty of EW is that the corrections in gold are remarkably regular and consistent. Early in 2002 I picked up the 4%, 4%, 8% rhythm in the gold market which convinced me that a new bull market had started in gold. Another feature of EW is that once one is confident that these percentages have been established and one has some idea of the approximate size of the up moves, simple arithmetic allows one to calculate a forecast of the future price trend.
Using this method I calculated that the gold price should rise from the $300 ruling in 2002 to at least $750 without having anything worse than two 16% corrections on the way. That was valuable information at that time. Furthermore, from the $750 target a big 32% correction could be expected to about $500. Then the bull market would resume, rising to perhaps $2,500 before another 32% correction occurred. The final up-move would take the gold price to much higher levels, possibly $6,000. Once again, a valuable insight when gold was $300 in 2002.
The gold price actually got to a shade over $1000 in March 2008, a four-fold increase instead of the expected three-fold rise to $750. That was the point at which the 32% correction was due. Over the next seven months the gold price in the spot market declined from $1003 to $680, an exact 32% correction. Using PM gold fixings, the numbers were slightly different. The high was $1011.0 and the low $712.5, making the correction slightly less than 30%, but quite adequate.
The above chart depicts the monthly spot gold prices since the start of the gold bull market in April 2001 when gold was $255. The 32% correction in terms of spot gold is clearly shown. The high at $1003 and the low at $680 established the extremities of the first two major waves of the bull market, shown in the chart as Major ONE and Major TWO. The gold bull market is in the process of working its way upward through Major THREE, often the longest and strongest wave in the bull market. There have been a number of interesting and unusual developments in Major THREE which will be discussed later.
I would like digress at this point to share with you the reasons why I started writing articles on Gold, EW and monetary history. The reason I am standing here today is the direct result of writing those two series of articles published on internet web sites. I am a self-funded retired person managing my own investments. Unlike most people posting articles on the web, I was not trying to sell subscriptions to a newsletter or get people to buy something. Nor was I writing to big note myself. So if I was not after fame, glory or riches, what was my motivation? The following two stories will explain where I was coming from.
These stories are intensely personal. Even close friends and relatives have not heard these stories. They are not meant to infer any self-aggrandizement nor are they an attempt to alter anyone’s personal views. The two stories are linked and relate eventually to gold. Together they are the reason why I wrote the articles posted on the web.
The first story starts with an awful event where my son Richard was attacked by a lion. He and his fiancée Rebecca were managing a game lodge in northern Botswana. He took a couple of guests out on an early morning game drive. They followed the tracks of a lioness and three cubs down a dry river bed but lost the trail. When Richard got out of the vehicle to find lion tracks, the lioness launched herself at him from nearby shrubs. The lioness landed with her paws on his shoulders, dislocating one shoulder and driving him to his knees. She then whacked his head with her paws, virtually scalping him and nearly ripping his ear off. She then bit him on the back of the neck. Any person or animal subject to such an attack would almost certainly be dead.
Richard survived this vicious attack as a result of a series of miracles. The first miracle was that the bite on the back of his head had missed the vital arteries, missed the spinal column and had not penetrated the skull. If the lioness’ bite had been fractionally deeper, higher, lower or sideways, that would have been the end for Richard.
(In the speech, I skip to the story of the beggar’s sign. You can do likewise.)
The second miracle was that the couple in the vehicle reacted instantly. The wife yelled at the husband to get into the driver’s seat and drive at the lion, blowing the horn and making a noise. This caused the lioness to back off. Richard was still conscious and managed to get himself into the vehicle. He was able to work the radio to warn Rebecca of what had happened.
The third miracle was that a couple of weeks prior to this event the local team of paramedics had visited the safari lodge to give the staff a lesson on what to do in the event of a lion attack. Rebecca remembered everything that they had said. She reacted with astonishing calm. She assessed the wounds, called the paramedics by radio, got what she needed from the First Aid cabinet and then stayed with Richard staunching the blood flows until the paramedics arrived.
The fourth miracle was that after being flown to hospital in Gaberones, the capital of Botswana, Richard was allocated a doctor who fully understood how to treat lion injuries. He knew that he could not stitch Richard’s head for several days due to the threat of infection. Lions do not use Colgate’s tooth paste! Richard was given a full anesthetic on four consecutive days while the doctor cut away the portions that were infected.
Richard required very large amounts of blood. The paramedics had warned Rebecca that she should ensure that Richard was only given blood which was certified HIV negative. There was blood available but none of it came with the necessary certificate. How the vital blood was obtained was another miracle, but that story is too long to discuss now.
When the stitches were removed from Richard’s skull, he was still left with a gaping wound at the back of his head. A skin graft from his thigh to the back of his head was required. A visiting plastic surgeon was able to do the necessary graft, but Richard had to later fly to Johannesburg for the surgeon to check that the graft had “taken” and to have the stitches removed.
(Story of the Beggar’s Sign begins here.)
When we visited the surgeon he pronounced that the graft had “taken” and that Richard was absolutely OK. All he needed was rest and recuperation to be as good as new. Any parent who has lost a child will understand the anguish and pain that we endured going through this episode. Now our son, brother, and fiancée, whom we thought we were going to lose, had been saved and returned to us.
At last we could relax. Nothing could go wrong now. You can imagine the joy and jubilation in the car as we drove away from the surgeon’s rooms. Then I saw a beggar at a traffic light. He was carrying a cardboard sign which read:
“No Money. No Food. Please Help Me. God Bless”.
Impulsively I decided that I wanted to buy his sign and hang it on my wall as a memento of this happy day. I had 200 Rand in my wallet, probably more than he made in a month of begging. I called him over, showed him the money and said that I wanted to buy his sign for R200. He simply said “No!” The lights turned green and people were honking behind me, so I gave the R200 to the beggar and drove on, leaving the beggar with his sign.
After dropping Richard and Rebecca with friends I passed the same intersection on the way to my lodgings. The beggar was still there and I was now more determined than ever to buy his sign. I called him over to the car. “I gave you R200 an hour ago, do you remember?” He said that he remembered, clutching his sign protectively to his chest.
“I want to buy your sign for a special reason. Just tell me how much you want for the sign and I will go to the nearest ATM and get the money.”
He shook his head and again said “No”, clutching his sign possessively to his chest. “It will only take you five minutes to make another one” I said, but that elicited another vehement “No” from him. The lights had changed and once again people were honking at me. “If you will not sell me your sign, at least tell me why you won’t sell it.” He replied “God gave me this sign!” I drove off with the words “God gave me this sign” reverberating through my brain.
I am an accountant and investment analyst by training. I am used to digging out facts, checking them and drawing conclusions from them. I am skilled at calculating odds and probabilities. The odds of Richard surviving such a terrible lion attack were off the charts. The odds of finding the only beggar in the world who would not sell his sign for any price were also astronomical.
I had always felt that I was in control of my life. I make the decisions and do things my way. Richard’s recovery from the lion attack was a situation over which I had no control and when I did try and take control of something and buy the beggar’s sign, I had been rudely rebuffed. The only logical conclusion was that God was giving me a sign that He was in control, not me. It was the most humbling moment of my life. Faith is a gift, but it seems that some people have to be bashed over the head in order to accept that gift.
This unusual story needed to be told in order to fully understand the second strange story that does deal with gold. The link came through the Priest in the London parish where we lived for a few years. He had been asked to request prayers for Richard’s recovery and as a result we got to know him quite well. He is a cricket fanatic. When I heard that he planned to visit Australia to watch the cricket series between Australia and England in late 2002 and early 2003, I invited him to stay with us at our house on the northern beaches for a couple of days after the Sydney cricket test in January 2003.
In due course I picked him up from the city. It is about an hour’s drive to our house, so we had plenty of time to chat. He wanted to know if I had done anything special over the past year. I responded that I had made a dramatic change in our family investments during the year, putting some 40% of our capital into gold, silver and mining shares. He was clearly interested and wanted to know why I had done this. I said that I could see a number of problems developing, especially in America, that would eventually result in a major financial crisis which would threaten to bring down the entire world money and banking system. The authorities would create vast new sums of money in an attempt to prevent this melt-down from happening, resulting ultimately in the destruction of paper currencies. This would require the establishment of a new monetary system and I expected gold to be a major part of the new monetary system.
He then asked a strange question: “How high do you think that the gold price can go?” I tried to dodge the question as I did not want to explain Elliott Waves to him, so I just said that gold would probably rise to extraordinary heights. I explained that the extent of the gold price rise depended on the quantity of new money created to ward off the anticipated crisis. He persisted, wanting to know what “extraordinary heights” meant. He obviously wanted a fixed number.
To mollify him I said that in the 1970’s bull market gold had increased 25-fold from $35 to over $850. If the new gold bull market was of the same order, then starting from a base of $255, the current bull market could reach somewhere over $6,000 per ounce. He then wanted to know what the current gold price was. When I said it was about $300, he seemed satisfied.
The next morning the two of us went for a jog on the beach. He asked if I believed in prophecy. I said that I had not really thought about it. Given that there were prophets in the Old Testament who seemed to have the word of God and in the New Testament there were people who had the gift of prophecy, well yes, I guess that I probably had to believe in prophecy.
He then told me this remarkable story. In his London Parish there was a lady who did have the gift of prophecy. She had received several prophecies that had related to him which proved to be accurate. As a result he was convinced that she had the true gift of prophecy. There was an occasion when this lady received an unusual prophecy, quite different to anything she had previously experienced. She thought that if the Parish Priest telephoned her, she would know that she had to tell him about it. Indeed he did telephone, so she told him that she had received this very strange prophecy. She had been instructed to write it down and mail it to him. He was to keep it unopened until she called to let him know that it was time to open the envelope.
A few days before he was scheduled to fly to Australia she telephoned him to say that it was time to open the envelope. The prophecy consisted of just one line which read: “The price of gold will rise to extraordinary heights!” These were the exact words that I had used the previous day in our conversation in the car. He concluded that this prophecy was meant for me!
I was quite shocked, gob-smacked actually. I would normally have shrugged it off as an interesting story and forgotten about it. After the lion episode and my experience with the beggar, I was more inclined to take it seriously. What did it mean? There was nothing new in it for me, other than being a confirmation from a very strange source that my views were correct.
I felt that there must be a deeper reason for receiving such a strange message. I concluded, somewhat reluctantly, that if I had been given the talent and knowledge to see such a dramatic financial crisis coming down the track, then surely I had a responsibility to warn people about it?
The crisis that was coming had the potential to be the biggest event in the lives of the current generation. It was likely to become the most important factor governing investment decisions when the crisis arrived. So I started trying to alert people to the serious financial and monetary crisis that I could see coming and warn them to buy precious metals as protection.
Talking to friends and fund managers about my views, I ran head first into the Moses Principle. The new generation had not received an education on monetary history, nor what qualities money should have. I was met with glazed eyes and body language that showed no interest in what I was saying. I was talking in many instances to the “new rich” generation. They were the bankers, investment managers, stockbrokers, hedge fund managers and others who were massaging the vast sums of money and credit that had been created since 1971. They were taking their percentage of the funds that flowed through their businesses and were doing very nicely. They didn’t want to listen to a grey-haired old fogey spruiking a coming crisis that was going to wreck the gravy train that they were living off. Clearly this method was a failure.
The solution was to publish articles on internet web sites to get my message across. I had to proceed slowly and cautiously, only giving information that people could accept at that time. It was April 2005 before I felt confident that I could write an article titled “The Seven D’s of the Developing Disaster” about the problems that I could see developing, all starting with the letter D, – debt, deficits (budget and trade), the US dollar itself, demographics (baby boomer unfunded entitlements), derivatives, dwellings, deflation (including deleveraging) and destruction, being the long running wars in Iraq and Afghanistan. This article is located at:
http://www.gold-eagle.com/editorials_05/field042805.html
When the financial crisis eventually arrived in 2007, it was sparked by derivatives (credit default obligations – CDO’s) and events in the real estate market (dwellings). The arrival of the crisis allowed me to write more aggressively. By late 2008 there was a much greater awareness of the problems and I felt that I could leave it to others to deal with the ongoing consequences.
In August 2003, in parallel with the money/economic articles, I started forecasting the gold price using the Elliott Wave system. Here too I had to proceed slowly. I felt that I could not reveal my longer term forecast for the gold price because it was so bullish that I would be branded as a nut case. When I wrote my final Elliott Wave article in November 2008 I did reveal the full picture, showing that there was a possibility that gold could reach the extraordinary heights of $10,000. At that time gold was in the $750 area. That article can be found at:
http://www.gold-eagle.com/editorials_08/field112408.html
IMPACT OF THE MOSES PRINCIPLE.
It is now time to return to the Moses Principle and its impact on the gold price. Perhaps the most important point is that the modern Moses generation has had very little exposure to monetary history. They do not understand what has caused the current financial crisis. If one does not know what caused the current crisis, one cannot know how to go about fixing it. Central Bankers and Finance Ministers are also part of the Moses generational change. By the late 1990’s the new incumbents had experienced a 20 year bear market in gold and were influenced by Keynesian economics.
They didn’t understand why gold was held in their country’s foreign exchange reserves and resorted to the wholesale selling of this unnecessary “barbarous relic”. Famously Gordon Brown sold two-thirds of Britain’s gold stock near the bear market lows in 2001/2002. Australia sold a similar proportion of its gold. The European Central banks were selling gold but had a joint agreement to restrict their combined sales to 400t per annum. Even conservative Switzerland sold some of its gold reserves.
Originally it seemed that Central bankers were selling gold to protect the integrity and longevity of their paper currencies. Perhaps, with the generational change, they did not know any better. Perhaps it was just the “thing to do” at the time. Despite this central bank selling, the gold price went up! Buying by investors/hoarders had exceeded official selling and a new gold bull market was born. Central bank selling of gold gradually declined. Recently central banks under the leadership of Russia and Asian nations became net buyers of gold. The GFC has created a much greater awareness in official circles of the role that gold plays as a store of value asset in national reserves.
The distortions that have grown out of the 40 year period since 1971 have reached proportions that demand change. The problem is that the current generation does not understand that the root cause of the GFC is unsound money created at will by governments, combined with a banking system that has enabled the creation of an unsustainable mountain of debt. The modern generation is groping with the problem and gradually working towards understanding that the underlying cause of the crisis is monetary.
The modern generation will have to face some brutal truths as the world deals with the ongoing global financial crisis. The following are the brutal truths that apply to the USA and the world:
THE BRUTAL TRUTHS
There are two things that are different about the current episode. This is the first time in history that fiat or government issued currency has been in use in every country around the world at the same time. Secondly, we have an electronic money system which is very efficient. It enables new money to be created at a faster rate than ever before.
Every experiment with government issued fiat money has ended with the destruction of that money There is no reason to believe that it will be different this time. The world’s 40 year experiment with floating “I owe you nothing” fiat currencies is coming to an end.
I have come out of retirement for this one off, once only, speech to warn that the good ship “Life As We Know It” is sinking.
You have the choice of getting into a life boat now or going down with the ship. The life boats consist of precious metals and other assets that will survive the coming currency destruction.
It is likely that gold will be the new unit of measurement or standard of value against which the performance of other assets will be judged. The challenge will be to find assets that perform better than gold.
The forecast contained in the “Brutal Facts” segment is not a pleasant one. It is unfortunately the most likely outcome. All that we can do is to “be prepared”. It is vital for one’s personal financial survival to take action now.
In conclusion, I would like to mention that my son Richard is married to Rebecca and they have a 4 and a half year old daughter with another baby on the way. They live in Sydney and Richard works for a local company organizing tailor made safaris to Africa for small groups. If you have any interest in doing such a trip, you can contact him at:
rfield@epicprivatejourneys.com
Alf Field ajfield@attglobal.net
7 November 2011.
ADDENDUM: Update of the Elliott Wave Gold Analysis
I promised that I would reveal some interesting things about the EW moves in gold since the $681 low in October 2008. That low was the start of the Major THREE wave. In Major ONE I mentioned that the corrections were 4%, 8%, 16% and then 32%.
We know that Major THREE will likely be longer and stronger than the prior Major ONE up wave. It is logical to expect that the corrections in major THREE will be a larger percentage than those experienced in Major ONE. This is how the first Intermediate wave of Major THREE developed in terms of London PM Fixings:
Intermediate Wave I in London PM Fixings
Extended waves are simply waves that subdivide into an additional 5 waves. It happens mainly to 5th waves and generally makes life difficult for EW analysts. Difficult yes, but not impossible.. The analysis of the first extension, the extension of wave 5, is set out below:
Wave 5 of Intermediate Wave I – based on London PM fixings.
(1) 1058 to 1261 +$203 +19.2%
(2) 1261 to 1157 -$104 – 8.2%
(3) 1157 to 1421 +$264 +22.8%
(4) 1421 to 1319 -$102 – 7.2%
(5) 1319 to 1549 +$230 +17.5%
Wave 5 1058 to 1549 +$491 +46.4%
NOTE: From the $1319 start of wave (5) above, the target price was $1319 + 19.2%, the same gain as wave (1), giving a target of $1572. The high price for gold in wave (5) in the spot market was $1576 on a day (2 May 2011) when the UK had a public holiday and there was no London PM fix available. Thus the gain for wave (5) was stunted in terms of PM fixes. This is not satisfactory and it became necessary to revert to analysing the waves in spot gold prices to get accurate readings. This was also required in order to pick up the minor waves in the final two extensions which were explosive in nature.
To illustrate how to analyse gold using EW through this difficult period, it is best to work through the time line as it actually happened. As noted above, the expectation was that following the completion of the extended wave 5, a correction one degree larger than 12% would occur from the peak of wave (5) at $1576.
Gold had a minor correction to $1478 in the spot market and then started a sharp upward move. When gold went to a new high above $1576 the probability of the big 24% (give or take 3%) correction occurring at that time receded. The stronger probability was that a new 5th wave extension was underway. This was the first of the explosive series of extensions in gold. It became an historic sequence of four 5th wave extensions in declining orders of magnitude.
At the end of each extended wave, the spectre of the bigger correction (21% to 27%) came into focus. With each new high, the bigger correction was delayed and a new extended wave was born. At $1814, after three 5th wave extensions, the probability that $1814 was THE high was about 80%. Another extension at an even smaller degree was accorded only a 15% probability. The remaining 5% covered the possibility that the wave count was wrong and that a completely different outcome was evolving.
From $1814 gold had a minor correction to $1723, then blasted through $1814 to new all time high prices. The odds of a fourth 5th wave extension at the smallest degree changed from a meagre 15% to a 90% certainty. The wave count at this smallest degree helped to determine in real time that at a price over $1910 gold was in serious danger of an important top, with the bigger correction certain to follow.
Both charts updated to 7 October 2011 and illustrate the wave counts described.
We can now consider the possible magnitude of the current correction from the $1913 top. The correction will be one degree larger than the prior corrections, 12% in PM fixes and 14% in spot gold, an average of 13%. That compares with 8% in Major ONE. Both 8 and 13 are Fibonacci numbers, so it may be that the next correction could be 21%, the next Fibonacci number.
In Major ONE, the corrections tended to double when they moved up a degree in magnitude, so one must consider 26%, double 13%, as a possibility. A 21% correction from the peak of $1913 gives a target of $1511. A 26% correction would target $1416. There is one further possible target and that is $1478, the point at which the explosive extensions commenced. The price of an item will often retrace the full amount of the explosive extension. There was a recent example in silver of such a full retracement of the explosive extension, see the chart below:
This analysis was prepared on 27 September 2011, the day after spot silver reached a low price of $26.59. The start of the extension was at $26.50 on 28 January 2011. A mere 3 months later, at the end of April, silver topped at $49.50, a very obvious explosive advance. Silver then traced out an A-B-C correction where the A and C waves were declines of similar size at $17 each, a typical EW relationship. At that low point of $26.59 on 26 Sept 2011 – the silver price had exactly retraced the full gain achieved in the explosive extension. The conclusion was that there was at least an 80% probability that the silver correction had bottomed at $26.59.
If gold retraces the exact gain achieved during the explosive advance from $1478 to $1913, which occurred in just seven weeks, it will represent a decline of 22.8%. That is nicely within the above anticipated range of 21% to 26% for the current decline in gold. There is a possibility that the spike drop to $1531 on 26 September marked the low point of the correction in gold. The midpoint of the correction from $1576 to $1478 is $1527, close to $1531. If $1531 was the low, it was a decline of 20%. This is slightly below expectations, but it still qualifies as one degree larger than 13%. At the date of writing (7 Nov 2011), gold has recovered to $1767, which is a 61.8% retracement of the loss from $1913 to $1531 (-$382), a typical size for this type of recovery. That leaves open the possibility (40% probability?) that gold will have another dip to test the target areas mentioned. The higher the price goes above $1767, the greater the probability that the low was in at $1531.
Once this correction has been completed, Intermediate Wave III of Major THREE will be underway. This should be the largest and strongest wave in the entire gold bull market. The target for this wave should be around $4,500 with only two 13% corrections on the way.
The word seems to be spreading.
A protester on Wall Street. Be careful what you wish for.
by Jim Sinclair in the category Alf Field
My Dear Friends,
You know I have great respect for Alf Fields both as a master of his methods (there are very few) but also for having a mercantile sense which cannot be taught. You know of his accuracy during the two major bull markets for gold.
I fully agree with Alf on the potential of the next move. I feel confident the accordion chop that Kenny points out did complete itself on the day of the longest predicted period of consolidation.
I see gold headed into the $2000, but only as another steep on its way to Alf’s number.
Respectfully,
Jim
The Skinny:
"Once this correction has been completed, Intermediate Wave III of Major THREE will be underway. This should be the largest and strongest wave in the entire gold bull market. The target for this wave should be around $4,500 with only two 13% corrections on the way."
KEYNOTE SPEECH AT SYDNEY GOLD SYMPOSIUM 14-15 NOVEMBER 2011
BY ALF FIELD
THE MOSES PRINCIPLE
The Moses Principle is an irreverent theory based on the question of why Moses spent 40 years traversing the Sinai desert before leading the Israelites to the “promised land”.
God was powerful enough to send numerous plagues to devastate the Egyptian economy until Pharaoh allowed the Israelites to leave Egypt. Later God caused the Red Sea to part so that the Israelites crossed on a dry sea bed. When the pursuing Egyptian army and their chariots were in the sea bed, the waters crashed back and drowned them.
If God was powerful enough to do all of these things, why not allow the Israelites to go straight to the “promised land”? Why did Moses spend 40 years traversing the barren desert before leading the Israelites to the “promised land”? Here is the irreverent theory. Every Israelite over middle age when they left Egypt probably died during the ensuing 40 years. The younger people were born in the desert or spent their adult lives in the desert. After 40 years the life experience of the survivors consisted of living in the desert. When they finally got to the “promised land” it appeared to be “flowing with milk and honey” when compared to their prior desert existence.
A total generational change had taken place so that the survivors had no knowledge of anything other than the desert. There was nobody who could remember what Egypt was like. The Moses Principle recognizes the fact that over any 40 year period, a generational change takes place.
What has this got to do with gold? Recently we passed the 40th anniversary of 15 August 1971, the date when the last link between currencies and gold was ended by President Nixon. This launched an era of floating “I owe you nothing” currencies. Money was what any government deemed it to be, generally something that the government could create in unlimited quantities. That system, plus the fractional reserve banking system, launched an era of ever increasing debt and credit. It was an era where debt was desirable and money lost its purchasing power.
Everyone in this room has spent their adult lives living under this system. Most have had no exposure to monetary history or what money really is. The new “Moses” generation will have to re-learn the lessons of monetary history before the world can enter a new era of sound money and stable economic growth. The impact of this generational change will be discussed later.
The 15 August 1971 was an important date for me personally. I had grown up in South Africa and in early 1970 started a funds management company with a good friend of mine. The first 18 months was a struggle as we were buffeted by a vicious bear market. By August 1971 our clients were largely in cash awaiting the end of the bear market or an inspirational idea.
That inspirational idea came on 15 August 1971 when I heard that President Nixon had decreed that the USA would no longer exchange US dollars held by foreign governments for gold at $35 per ounce. Gold had limited downside but appeared to have good potential for substantial gain. Gold shares were deeply depressed after 37 years of a fixed $35 gold price, another “Moses Principle” period. We bought gold shares aggressively. This proved to be an astute move and our funds management business was launched on a successful path.
Having locked ourselves into a big position in gold shares, we needed to have some idea of how the gold price might perform and how high it might rise. We ran into the conundrum that has confounded fundamental analysts since 1971. How do you value something that has no utility value, no earnings or net asset value, does not spoil or corrode and is not used up?
Other commodities such as copper, soya beans and corn etc., are priced using a combination of demand, supply and stocks. If demand exceeds supply, stocks diminish, shortages develop, prices rise and new production comes on stream. Eventually supply exceeds demand, stocks build up, prices decline and marginal producers go out of business. The cycle then repeats itself. Other commodities are produced for consumption while gold is accumulated.
Consequently large stocks of gold exist in official hands as central bank reserves. There are also large stocks of gold in private ownership, in vaults around the world, in homes, buried in gardens, in coins and gold jewelry. New mine production of gold is tiny compared to available stocks. In 1971 official holdings of gold were about 37,000t. Cumulative world gold production throughout history up to 1971 was estimated to be about 90,000t, so investors/hoarders must have owned at least as much as the official holdings. In 1971 world gold production was a mere 1,450t, or less than 2% of the estimated amount of gold held in the world at that time.
The fundamental conclusion was that the owners of the large stocks of gold would determine the future of the gold price. If they became net sellers, the gold price would decline. If they became net buyers, the gold price would rise. There were reasons to believe that they would be net buyers. The world had been launched into an untried experiment where all countries were subject to Government fiat currencies and, in addition, there was a latent group of buyers in the wings. Americans had been prevented by law from holding gold since 1933. With the collapse of the gold exchange standard on 15 August 1971, there was no reason for this prohibition to continue. On 31 December 1974 (another Moses generation period from 1933) the largest and wealthiest nation on Earth allowed its citizens to buy and own gold.
The obvious conclusion was that it was necessary to resort to technical analysis to find a way to predict movements in the gold price. I experimented with a variety of technical systems and then got lucky. I discovered that the Elliott Wave Theory (EW) gave superb results in predicting the gold price. I couldn’t get the same great results using EW in other commodities or markets. EW is a complicated system with many difficult rules, but I will try and explain it in simple terms.
The technique is to concentrate on the corrections. In terms of EW, the sequence in a bull market is as follows. The market rises, has a 4% correction, rises, has a 4% correction and rises again. At this point the next correction jumps from 4% to a larger degree of magnitude, say 8%. The market then repeats the sequence. A rise, a 4% correction, a rise, 4% correction, a rise and another 8% correction. When the market is eventually due a third 8% correction, the magnitude of that correction jumps from 8% to 16%. This sequence is repeated until two 16% corrections have occurred when the size of the next big correction jumps to 32%.
The beauty of EW is that the corrections in gold are remarkably regular and consistent. Early in 2002 I picked up the 4%, 4%, 8% rhythm in the gold market which convinced me that a new bull market had started in gold. Another feature of EW is that once one is confident that these percentages have been established and one has some idea of the approximate size of the up moves, simple arithmetic allows one to calculate a forecast of the future price trend.
Using this method I calculated that the gold price should rise from the $300 ruling in 2002 to at least $750 without having anything worse than two 16% corrections on the way. That was valuable information at that time. Furthermore, from the $750 target a big 32% correction could be expected to about $500. Then the bull market would resume, rising to perhaps $2,500 before another 32% correction occurred. The final up-move would take the gold price to much higher levels, possibly $6,000. Once again, a valuable insight when gold was $300 in 2002.
The gold price actually got to a shade over $1000 in March 2008, a four-fold increase instead of the expected three-fold rise to $750. That was the point at which the 32% correction was due. Over the next seven months the gold price in the spot market declined from $1003 to $680, an exact 32% correction. Using PM gold fixings, the numbers were slightly different. The high was $1011.0 and the low $712.5, making the correction slightly less than 30%, but quite adequate.
The above chart depicts the monthly spot gold prices since the start of the gold bull market in April 2001 when gold was $255. The 32% correction in terms of spot gold is clearly shown. The high at $1003 and the low at $680 established the extremities of the first two major waves of the bull market, shown in the chart as Major ONE and Major TWO. The gold bull market is in the process of working its way upward through Major THREE, often the longest and strongest wave in the bull market. There have been a number of interesting and unusual developments in Major THREE which will be discussed later.
I would like digress at this point to share with you the reasons why I started writing articles on Gold, EW and monetary history. The reason I am standing here today is the direct result of writing those two series of articles published on internet web sites. I am a self-funded retired person managing my own investments. Unlike most people posting articles on the web, I was not trying to sell subscriptions to a newsletter or get people to buy something. Nor was I writing to big note myself. So if I was not after fame, glory or riches, what was my motivation? The following two stories will explain where I was coming from.
These stories are intensely personal. Even close friends and relatives have not heard these stories. They are not meant to infer any self-aggrandizement nor are they an attempt to alter anyone’s personal views. The two stories are linked and relate eventually to gold. Together they are the reason why I wrote the articles posted on the web.
The first story starts with an awful event where my son Richard was attacked by a lion. He and his fiancée Rebecca were managing a game lodge in northern Botswana. He took a couple of guests out on an early morning game drive. They followed the tracks of a lioness and three cubs down a dry river bed but lost the trail. When Richard got out of the vehicle to find lion tracks, the lioness launched herself at him from nearby shrubs. The lioness landed with her paws on his shoulders, dislocating one shoulder and driving him to his knees. She then whacked his head with her paws, virtually scalping him and nearly ripping his ear off. She then bit him on the back of the neck. Any person or animal subject to such an attack would almost certainly be dead.
Richard survived this vicious attack as a result of a series of miracles. The first miracle was that the bite on the back of his head had missed the vital arteries, missed the spinal column and had not penetrated the skull. If the lioness’ bite had been fractionally deeper, higher, lower or sideways, that would have been the end for Richard.
(In the speech, I skip to the story of the beggar’s sign. You can do likewise.)
The second miracle was that the couple in the vehicle reacted instantly. The wife yelled at the husband to get into the driver’s seat and drive at the lion, blowing the horn and making a noise. This caused the lioness to back off. Richard was still conscious and managed to get himself into the vehicle. He was able to work the radio to warn Rebecca of what had happened.
The third miracle was that a couple of weeks prior to this event the local team of paramedics had visited the safari lodge to give the staff a lesson on what to do in the event of a lion attack. Rebecca remembered everything that they had said. She reacted with astonishing calm. She assessed the wounds, called the paramedics by radio, got what she needed from the First Aid cabinet and then stayed with Richard staunching the blood flows until the paramedics arrived.
The fourth miracle was that after being flown to hospital in Gaberones, the capital of Botswana, Richard was allocated a doctor who fully understood how to treat lion injuries. He knew that he could not stitch Richard’s head for several days due to the threat of infection. Lions do not use Colgate’s tooth paste! Richard was given a full anesthetic on four consecutive days while the doctor cut away the portions that were infected.
Richard required very large amounts of blood. The paramedics had warned Rebecca that she should ensure that Richard was only given blood which was certified HIV negative. There was blood available but none of it came with the necessary certificate. How the vital blood was obtained was another miracle, but that story is too long to discuss now.
When the stitches were removed from Richard’s skull, he was still left with a gaping wound at the back of his head. A skin graft from his thigh to the back of his head was required. A visiting plastic surgeon was able to do the necessary graft, but Richard had to later fly to Johannesburg for the surgeon to check that the graft had “taken” and to have the stitches removed.
(Story of the Beggar’s Sign begins here.)
When we visited the surgeon he pronounced that the graft had “taken” and that Richard was absolutely OK. All he needed was rest and recuperation to be as good as new. Any parent who has lost a child will understand the anguish and pain that we endured going through this episode. Now our son, brother, and fiancée, whom we thought we were going to lose, had been saved and returned to us.
At last we could relax. Nothing could go wrong now. You can imagine the joy and jubilation in the car as we drove away from the surgeon’s rooms. Then I saw a beggar at a traffic light. He was carrying a cardboard sign which read:
“No Money. No Food. Please Help Me. God Bless”.
Impulsively I decided that I wanted to buy his sign and hang it on my wall as a memento of this happy day. I had 200 Rand in my wallet, probably more than he made in a month of begging. I called him over, showed him the money and said that I wanted to buy his sign for R200. He simply said “No!” The lights turned green and people were honking behind me, so I gave the R200 to the beggar and drove on, leaving the beggar with his sign.
After dropping Richard and Rebecca with friends I passed the same intersection on the way to my lodgings. The beggar was still there and I was now more determined than ever to buy his sign. I called him over to the car. “I gave you R200 an hour ago, do you remember?” He said that he remembered, clutching his sign protectively to his chest.
“I want to buy your sign for a special reason. Just tell me how much you want for the sign and I will go to the nearest ATM and get the money.”
He shook his head and again said “No”, clutching his sign possessively to his chest. “It will only take you five minutes to make another one” I said, but that elicited another vehement “No” from him. The lights had changed and once again people were honking at me. “If you will not sell me your sign, at least tell me why you won’t sell it.” He replied “God gave me this sign!” I drove off with the words “God gave me this sign” reverberating through my brain.
I am an accountant and investment analyst by training. I am used to digging out facts, checking them and drawing conclusions from them. I am skilled at calculating odds and probabilities. The odds of Richard surviving such a terrible lion attack were off the charts. The odds of finding the only beggar in the world who would not sell his sign for any price were also astronomical.
I had always felt that I was in control of my life. I make the decisions and do things my way. Richard’s recovery from the lion attack was a situation over which I had no control and when I did try and take control of something and buy the beggar’s sign, I had been rudely rebuffed. The only logical conclusion was that God was giving me a sign that He was in control, not me. It was the most humbling moment of my life. Faith is a gift, but it seems that some people have to be bashed over the head in order to accept that gift.
This unusual story needed to be told in order to fully understand the second strange story that does deal with gold. The link came through the Priest in the London parish where we lived for a few years. He had been asked to request prayers for Richard’s recovery and as a result we got to know him quite well. He is a cricket fanatic. When I heard that he planned to visit Australia to watch the cricket series between Australia and England in late 2002 and early 2003, I invited him to stay with us at our house on the northern beaches for a couple of days after the Sydney cricket test in January 2003.
In due course I picked him up from the city. It is about an hour’s drive to our house, so we had plenty of time to chat. He wanted to know if I had done anything special over the past year. I responded that I had made a dramatic change in our family investments during the year, putting some 40% of our capital into gold, silver and mining shares. He was clearly interested and wanted to know why I had done this. I said that I could see a number of problems developing, especially in America, that would eventually result in a major financial crisis which would threaten to bring down the entire world money and banking system. The authorities would create vast new sums of money in an attempt to prevent this melt-down from happening, resulting ultimately in the destruction of paper currencies. This would require the establishment of a new monetary system and I expected gold to be a major part of the new monetary system.
He then asked a strange question: “How high do you think that the gold price can go?” I tried to dodge the question as I did not want to explain Elliott Waves to him, so I just said that gold would probably rise to extraordinary heights. I explained that the extent of the gold price rise depended on the quantity of new money created to ward off the anticipated crisis. He persisted, wanting to know what “extraordinary heights” meant. He obviously wanted a fixed number.
To mollify him I said that in the 1970’s bull market gold had increased 25-fold from $35 to over $850. If the new gold bull market was of the same order, then starting from a base of $255, the current bull market could reach somewhere over $6,000 per ounce. He then wanted to know what the current gold price was. When I said it was about $300, he seemed satisfied.
The next morning the two of us went for a jog on the beach. He asked if I believed in prophecy. I said that I had not really thought about it. Given that there were prophets in the Old Testament who seemed to have the word of God and in the New Testament there were people who had the gift of prophecy, well yes, I guess that I probably had to believe in prophecy.
He then told me this remarkable story. In his London Parish there was a lady who did have the gift of prophecy. She had received several prophecies that had related to him which proved to be accurate. As a result he was convinced that she had the true gift of prophecy. There was an occasion when this lady received an unusual prophecy, quite different to anything she had previously experienced. She thought that if the Parish Priest telephoned her, she would know that she had to tell him about it. Indeed he did telephone, so she told him that she had received this very strange prophecy. She had been instructed to write it down and mail it to him. He was to keep it unopened until she called to let him know that it was time to open the envelope.
A few days before he was scheduled to fly to Australia she telephoned him to say that it was time to open the envelope. The prophecy consisted of just one line which read: “The price of gold will rise to extraordinary heights!” These were the exact words that I had used the previous day in our conversation in the car. He concluded that this prophecy was meant for me!
I was quite shocked, gob-smacked actually. I would normally have shrugged it off as an interesting story and forgotten about it. After the lion episode and my experience with the beggar, I was more inclined to take it seriously. What did it mean? There was nothing new in it for me, other than being a confirmation from a very strange source that my views were correct.
I felt that there must be a deeper reason for receiving such a strange message. I concluded, somewhat reluctantly, that if I had been given the talent and knowledge to see such a dramatic financial crisis coming down the track, then surely I had a responsibility to warn people about it?
The crisis that was coming had the potential to be the biggest event in the lives of the current generation. It was likely to become the most important factor governing investment decisions when the crisis arrived. So I started trying to alert people to the serious financial and monetary crisis that I could see coming and warn them to buy precious metals as protection.
Talking to friends and fund managers about my views, I ran head first into the Moses Principle. The new generation had not received an education on monetary history, nor what qualities money should have. I was met with glazed eyes and body language that showed no interest in what I was saying. I was talking in many instances to the “new rich” generation. They were the bankers, investment managers, stockbrokers, hedge fund managers and others who were massaging the vast sums of money and credit that had been created since 1971. They were taking their percentage of the funds that flowed through their businesses and were doing very nicely. They didn’t want to listen to a grey-haired old fogey spruiking a coming crisis that was going to wreck the gravy train that they were living off. Clearly this method was a failure.
The solution was to publish articles on internet web sites to get my message across. I had to proceed slowly and cautiously, only giving information that people could accept at that time. It was April 2005 before I felt confident that I could write an article titled “The Seven D’s of the Developing Disaster” about the problems that I could see developing, all starting with the letter D, – debt, deficits (budget and trade), the US dollar itself, demographics (baby boomer unfunded entitlements), derivatives, dwellings, deflation (including deleveraging) and destruction, being the long running wars in Iraq and Afghanistan. This article is located at:
http://www.gold-eagle.com/editorials_05/field042805.html
When the financial crisis eventually arrived in 2007, it was sparked by derivatives (credit default obligations – CDO’s) and events in the real estate market (dwellings). The arrival of the crisis allowed me to write more aggressively. By late 2008 there was a much greater awareness of the problems and I felt that I could leave it to others to deal with the ongoing consequences.
In August 2003, in parallel with the money/economic articles, I started forecasting the gold price using the Elliott Wave system. Here too I had to proceed slowly. I felt that I could not reveal my longer term forecast for the gold price because it was so bullish that I would be branded as a nut case. When I wrote my final Elliott Wave article in November 2008 I did reveal the full picture, showing that there was a possibility that gold could reach the extraordinary heights of $10,000. At that time gold was in the $750 area. That article can be found at:
http://www.gold-eagle.com/editorials_08/field112408.html
IMPACT OF THE MOSES PRINCIPLE.
It is now time to return to the Moses Principle and its impact on the gold price. Perhaps the most important point is that the modern Moses generation has had very little exposure to monetary history. They do not understand what has caused the current financial crisis. If one does not know what caused the current crisis, one cannot know how to go about fixing it. Central Bankers and Finance Ministers are also part of the Moses generational change. By the late 1990’s the new incumbents had experienced a 20 year bear market in gold and were influenced by Keynesian economics.
They didn’t understand why gold was held in their country’s foreign exchange reserves and resorted to the wholesale selling of this unnecessary “barbarous relic”. Famously Gordon Brown sold two-thirds of Britain’s gold stock near the bear market lows in 2001/2002. Australia sold a similar proportion of its gold. The European Central banks were selling gold but had a joint agreement to restrict their combined sales to 400t per annum. Even conservative Switzerland sold some of its gold reserves.
Originally it seemed that Central bankers were selling gold to protect the integrity and longevity of their paper currencies. Perhaps, with the generational change, they did not know any better. Perhaps it was just the “thing to do” at the time. Despite this central bank selling, the gold price went up! Buying by investors/hoarders had exceeded official selling and a new gold bull market was born. Central bank selling of gold gradually declined. Recently central banks under the leadership of Russia and Asian nations became net buyers of gold. The GFC has created a much greater awareness in official circles of the role that gold plays as a store of value asset in national reserves.
The distortions that have grown out of the 40 year period since 1971 have reached proportions that demand change. The problem is that the current generation does not understand that the root cause of the GFC is unsound money created at will by governments, combined with a banking system that has enabled the creation of an unsustainable mountain of debt. The modern generation is groping with the problem and gradually working towards understanding that the underlying cause of the crisis is monetary.
The modern generation will have to face some brutal truths as the world deals with the ongoing global financial crisis. The following are the brutal truths that apply to the USA and the world:
THE BRUTAL TRUTHS
- The slate needs to be wiped clean and a new sound monetary system introduced.
- That will require the elimination of all debt, deficits, unfunded social entitlements, the US Dollar as Reserve currency, and the big one, the $600 trillion of derivatives.
- To eliminate these problems by default and deflation will cause a banking collapse and untold economic pain, leading to riots and political change.
- Politicians are appointed for relatively short terms and opt for the easy solutions.
- While politicians continue to have the ability to create new money at will, they will do so in order to prevent a melt down on their watch.
- Consequently the odds point to governments wiping the slate clean by generating enough new money to eventually destroy their currencies.
- The new international monetary system is likely to involve precious metals. It will have to be money that people trust and that governments cannot create at will.
There are two things that are different about the current episode. This is the first time in history that fiat or government issued currency has been in use in every country around the world at the same time. Secondly, we have an electronic money system which is very efficient. It enables new money to be created at a faster rate than ever before.
Every experiment with government issued fiat money has ended with the destruction of that money There is no reason to believe that it will be different this time. The world’s 40 year experiment with floating “I owe you nothing” fiat currencies is coming to an end.
I have come out of retirement for this one off, once only, speech to warn that the good ship “Life As We Know It” is sinking.
You have the choice of getting into a life boat now or going down with the ship. The life boats consist of precious metals and other assets that will survive the coming currency destruction.
It is likely that gold will be the new unit of measurement or standard of value against which the performance of other assets will be judged. The challenge will be to find assets that perform better than gold.
The forecast contained in the “Brutal Facts” segment is not a pleasant one. It is unfortunately the most likely outcome. All that we can do is to “be prepared”. It is vital for one’s personal financial survival to take action now.
In conclusion, I would like to mention that my son Richard is married to Rebecca and they have a 4 and a half year old daughter with another baby on the way. They live in Sydney and Richard works for a local company organizing tailor made safaris to Africa for small groups. If you have any interest in doing such a trip, you can contact him at:
rfield@epicprivatejourneys.com
Alf Field ajfield@attglobal.net
7 November 2011.
ADDENDUM: Update of the Elliott Wave Gold Analysis
I promised that I would reveal some interesting things about the EW moves in gold since the $681 low in October 2008. That low was the start of the Major THREE wave. In Major ONE I mentioned that the corrections were 4%, 8%, 16% and then 32%.
We know that Major THREE will likely be longer and stronger than the prior Major ONE up wave. It is logical to expect that the corrections in major THREE will be a larger percentage than those experienced in Major ONE. This is how the first Intermediate wave of Major THREE developed in terms of London PM Fixings:
Intermediate Wave I in London PM Fixings
- Oct 08 to Feb 09 $712.5 to $989.0 + $276.5 +38.8%
- Feb 09 to Apl 09 $989.0 to $870.5 -$118.5 -12.0%
- Apl 09 to Dec 09 $870.5 to $1212.5 +$342.0 +39.3%
- Dec 09 to Feb 10 $1212.5 to $1058.0 -$154.5 -12.7%
- Feb 10 to Jun 2011 $1058.0 to $1549.0 +$491.0 +46.4%
Extended waves are simply waves that subdivide into an additional 5 waves. It happens mainly to 5th waves and generally makes life difficult for EW analysts. Difficult yes, but not impossible.. The analysis of the first extension, the extension of wave 5, is set out below:
Wave 5 of Intermediate Wave I – based on London PM fixings.
(1) 1058 to 1261 +$203 +19.2%
(2) 1261 to 1157 -$104 – 8.2%
(3) 1157 to 1421 +$264 +22.8%
(4) 1421 to 1319 -$102 – 7.2%
(5) 1319 to 1549 +$230 +17.5%
Wave 5 1058 to 1549 +$491 +46.4%
NOTE: From the $1319 start of wave (5) above, the target price was $1319 + 19.2%, the same gain as wave (1), giving a target of $1572. The high price for gold in wave (5) in the spot market was $1576 on a day (2 May 2011) when the UK had a public holiday and there was no London PM fix available. Thus the gain for wave (5) was stunted in terms of PM fixes. This is not satisfactory and it became necessary to revert to analysing the waves in spot gold prices to get accurate readings. This was also required in order to pick up the minor waves in the final two extensions which were explosive in nature.
To illustrate how to analyse gold using EW through this difficult period, it is best to work through the time line as it actually happened. As noted above, the expectation was that following the completion of the extended wave 5, a correction one degree larger than 12% would occur from the peak of wave (5) at $1576.
Gold had a minor correction to $1478 in the spot market and then started a sharp upward move. When gold went to a new high above $1576 the probability of the big 24% (give or take 3%) correction occurring at that time receded. The stronger probability was that a new 5th wave extension was underway. This was the first of the explosive series of extensions in gold. It became an historic sequence of four 5th wave extensions in declining orders of magnitude.
At the end of each extended wave, the spectre of the bigger correction (21% to 27%) came into focus. With each new high, the bigger correction was delayed and a new extended wave was born. At $1814, after three 5th wave extensions, the probability that $1814 was THE high was about 80%. Another extension at an even smaller degree was accorded only a 15% probability. The remaining 5% covered the possibility that the wave count was wrong and that a completely different outcome was evolving.
From $1814 gold had a minor correction to $1723, then blasted through $1814 to new all time high prices. The odds of a fourth 5th wave extension at the smallest degree changed from a meagre 15% to a 90% certainty. The wave count at this smallest degree helped to determine in real time that at a price over $1910 gold was in serious danger of an important top, with the bigger correction certain to follow.
Both charts updated to 7 October 2011 and illustrate the wave counts described. We can now consider the possible magnitude of the current correction from the $1913 top. The correction will be one degree larger than the prior corrections, 12% in PM fixes and 14% in spot gold, an average of 13%. That compares with 8% in Major ONE. Both 8 and 13 are Fibonacci numbers, so it may be that the next correction could be 21%, the next Fibonacci number.
In Major ONE, the corrections tended to double when they moved up a degree in magnitude, so one must consider 26%, double 13%, as a possibility. A 21% correction from the peak of $1913 gives a target of $1511. A 26% correction would target $1416. There is one further possible target and that is $1478, the point at which the explosive extensions commenced. The price of an item will often retrace the full amount of the explosive extension. There was a recent example in silver of such a full retracement of the explosive extension, see the chart below:
This analysis was prepared on 27 September 2011, the day after spot silver reached a low price of $26.59. The start of the extension was at $26.50 on 28 January 2011. A mere 3 months later, at the end of April, silver topped at $49.50, a very obvious explosive advance. Silver then traced out an A-B-C correction where the A and C waves were declines of similar size at $17 each, a typical EW relationship. At that low point of $26.59 on 26 Sept 2011 – the silver price had exactly retraced the full gain achieved in the explosive extension. The conclusion was that there was at least an 80% probability that the silver correction had bottomed at $26.59.
If gold retraces the exact gain achieved during the explosive advance from $1478 to $1913, which occurred in just seven weeks, it will represent a decline of 22.8%. That is nicely within the above anticipated range of 21% to 26% for the current decline in gold. There is a possibility that the spike drop to $1531 on 26 September marked the low point of the correction in gold. The midpoint of the correction from $1576 to $1478 is $1527, close to $1531. If $1531 was the low, it was a decline of 20%. This is slightly below expectations, but it still qualifies as one degree larger than 13%. At the date of writing (7 Nov 2011), gold has recovered to $1767, which is a 61.8% retracement of the loss from $1913 to $1531 (-$382), a typical size for this type of recovery. That leaves open the possibility (40% probability?) that gold will have another dip to test the target areas mentioned. The higher the price goes above $1767, the greater the probability that the low was in at $1531.
Once this correction has been completed, Intermediate Wave III of Major THREE will be underway. This should be the largest and strongest wave in the entire gold bull market. The target for this wave should be around $4,500 with only two 13% corrections on the way.
The word seems to be spreading.
A protester on Wall Street. Be careful what you wish for.
2011年11月15日星期二
生動的金融課！
假設世界上只有兩家人，老美兩口子和老華兩口子，開始他們兩家各幹各的，自給自足。一天，老美捉了4條魚，老華逮了8只鳥，老美想嘗嘗鳥味，老華想品品魚鮮，他們就交換了，老美用2條魚換了老華的4只鳥。以後他們常常這樣交換。
有一天，老美懶了，沒去捉魚，在家睡了一天。晚上，老華逮鳥回家，老美沒東西吃，就找老華借鳥吃。老美找一張樹皮，在上面寫上：2條魚。到老華家後，對老華說：『我來換你4只鳥。不過，我今天生病了，沒能去捉魚，我給你打2條魚的欠條。』老華說：『這好說。』把欠條收下，把4只鳥給了老美。老美回去吃得美滋滋的。
老美嘗到了這個甜頭，第二天又在家睡一天，晚上又拿2條魚的欠條去換了4只鳥。交換完畢，老美對老華說：『以後欠條上就不寫2條魚了，這欠條是我老美打的，以後就寫2美元吧。』老華欣然同意。以後欠條就用美元表示，如此日復一日。
按照商品交換的原則來說，商品交換應該是物物交換，商品換商品，而不是錢和物的交換。老美拿錢換了老華的鳥，老華得到錢，這不是商品交換的全過程，只是半個過程。老華手裡有老美的錢，就說明老美還欠老華的魚。所以，錢的本質就是欠條。等老華拿錢買了老美的魚後，商品交換的整個過程才結束。
這個過程就是老美用魚換了老華的鳥。如果老華始終不用錢去換老美的魚，那麼老美就占了大便宜了，白吃白喝老華的。可是，這裡，老美就設法始終不讓老華拿錢到他那裡兌換實物。
日子長了，老華手裡積攢的錢有一大堆。老美害怕老華來兌換實物，就對老華說：『現在我們之間的交易，你是順差，順差對你是非常有利的，你要保持下去。』
老華聽了很高興，就捨不得兌換實物了。老華就沒想起來問一問：『你是逆差，既然逆差不利，你為什麼要始終保持逆差呢？』
又過一天，老美覺得4只鳥不夠吃的，就寫了3美元，到老華家買了6只鳥。老美一天有6只鳥吃，老華反而只有2只鳥吃，餓得饑腸轆轆。但是一想到手裡有那麼多的錢，到老美家可以買很多很多的東西，夠自己養老的了，也就覺得值了。
以前，秦國利用其權威，經常為各國培養奸賊。外國的王公貴族到秦國去，秦國就教育他們：『以後只要秦國和你們的國家打仗，你們就割地，這對你們國家是最有利的。』這些王公貴族，回到自己的國家後，因為是從秦國留學回去的，滿腹經綸，都被委任要職。
後來，只要秦國的大兵一壓，或者一封討伐信一到，這些國家就立即割地。如今，美國的這種『順差有利』的理論被各國的留學生帶到世界，也就成了主流經濟學理論，美國靠印錢到各國買東西，各國都像守寶貝一樣守著美元，捨不得花，美國暗裡得意死了。
又過了很長一段時間，老華發現老美給他的一些錢被蟲蛀了，想到老美家把這些欠條兌換成實物。老美對他說：『這些錢都是財富，你怎麼能輕易花掉呢？你太奢侈了。你不要擔心我兌換不起你，我富裕的很，你看我吃的喝的，哪樣不比你好？』邊說邊指著屋裡的一口袋一口袋的鳥肉乾說：『你看我有這麼多的財富，你還擔心什麼？我完全能兌換得起你，你不要擔心，我拿我的人格發誓，我絕對不違約。
可是你有什麼，你就是個窮光蛋，天天餓得直打晃，我看著都可憐。俗話說，越窮越賴，我倒擔心你的信譽呢。』老美說完，忽然感到說得不好，又立即改口說道：『當然啦，你只是表面上窮，實際上你非常富裕，你有那麼多的外匯儲備。你看我有什麼，欠一屁股債。我倒感覺你對我的天下第一富的地位有嚴重威脅呢。』
老華被他說得，如同一口喝了二兩老白乾，頓時覺得暈暈忽忽的。老美又說道：『這充分說明你這條路走對了。今後你還要繼續走下去，我們之間的貿易是互惠互利的。我們要共同富裕。
老華感激萬分，忙向老美表態：『您放心，我是個負責任的人，絕對不失信！』老美又指著老華手裡的錢說道：『既然這些錢被蟲蛀了，我就給你重新寫個債券吧。算是我借你的債，付給你優厚的利息，一年後還錢。』老華一聽，這個合算，就換了一張債券回去。他們的交易又正常繼續下去。
終於有一天，老華有點醒悟了。他想：『老美這個傢伙天天什麼活都不幹，吃的喝的，全都是我的，比我過得還滋潤，我得到的只不過是些樹皮。而他總是想盡一切辦法，編出各種理論不讓我兌換實物，如果不能兌換，就只能當柴火燒。算了，以後就不和他交易了。』
晚上，老美又拿3美元去買鳥。老華不給他。老美就說：『如果你不賣給我，我就得餓死，那麼你手裡的美元和債券就全廢了。你要知道，現在救我就是救你自己。』老華聽了，不得已，還得和他交易。究竟和老美還繼續交易不交易？老華愁死了，但是在他妻子面前還得裝作很英明的樣子。
轉眼一年過去了，老華的妻子翻出老美的那張債券，催老華去討債。還塞給老華一大包美元，讓他順便到老美家多買點東西。老華怕減少外匯儲備，不想買東西，兩口子為此事爭吵起來。老華的妻子嚷道：『不買東西，留這些美元有什麼屁用？今後不准你再要他的美元，也不准你再要他的債券！』
聲音傳到隔壁，老美嚇死了。對他妻子說：『我倒不怕他們來討債，我造錢還他就是了，要多少有多少。說實話，我根本就不需要向他們借債，不管買什麼，我直接造錢付帳就行。
其實，不管是我發出去的債券，還是美元，本質都是債券，都表明我欠人家的實物。而我之所以要向他們借債，就是演戲，讓他們知道我對造錢很慎重，不輕易造錢，我也不造錢買東西，以保持他們對美元的信任。
有一天，老美懶了，沒去捉魚，在家睡了一天。晚上，老華逮鳥回家，老美沒東西吃，就找老華借鳥吃。老美找一張樹皮，在上面寫上：2條魚。到老華家後，對老華說：『我來換你4只鳥。不過，我今天生病了，沒能去捉魚，我給你打2條魚的欠條。』老華說：『這好說。』把欠條收下，把4只鳥給了老美。老美回去吃得美滋滋的。
老美嘗到了這個甜頭，第二天又在家睡一天，晚上又拿2條魚的欠條去換了4只鳥。交換完畢，老美對老華說：『以後欠條上就不寫2條魚了，這欠條是我老美打的，以後就寫2美元吧。』老華欣然同意。以後欠條就用美元表示，如此日復一日。
按照商品交換的原則來說，商品交換應該是物物交換，商品換商品，而不是錢和物的交換。老美拿錢換了老華的鳥，老華得到錢，這不是商品交換的全過程，只是半個過程。老華手裡有老美的錢，就說明老美還欠老華的魚。所以，錢的本質就是欠條。等老華拿錢買了老美的魚後，商品交換的整個過程才結束。
這個過程就是老美用魚換了老華的鳥。如果老華始終不用錢去換老美的魚，那麼老美就占了大便宜了，白吃白喝老華的。可是，這裡，老美就設法始終不讓老華拿錢到他那裡兌換實物。
日子長了，老華手裡積攢的錢有一大堆。老美害怕老華來兌換實物，就對老華說：『現在我們之間的交易，你是順差，順差對你是非常有利的，你要保持下去。』
老華聽了很高興，就捨不得兌換實物了。老華就沒想起來問一問：『你是逆差，既然逆差不利，你為什麼要始終保持逆差呢？』
又過一天，老美覺得4只鳥不夠吃的，就寫了3美元，到老華家買了6只鳥。老美一天有6只鳥吃，老華反而只有2只鳥吃，餓得饑腸轆轆。但是一想到手裡有那麼多的錢，到老美家可以買很多很多的東西，夠自己養老的了，也就覺得值了。
以前，秦國利用其權威，經常為各國培養奸賊。外國的王公貴族到秦國去，秦國就教育他們：『以後只要秦國和你們的國家打仗，你們就割地，這對你們國家是最有利的。』這些王公貴族，回到自己的國家後，因為是從秦國留學回去的，滿腹經綸，都被委任要職。
後來，只要秦國的大兵一壓，或者一封討伐信一到，這些國家就立即割地。如今，美國的這種『順差有利』的理論被各國的留學生帶到世界，也就成了主流經濟學理論，美國靠印錢到各國買東西，各國都像守寶貝一樣守著美元，捨不得花，美國暗裡得意死了。
又過了很長一段時間，老華發現老美給他的一些錢被蟲蛀了，想到老美家把這些欠條兌換成實物。老美對他說：『這些錢都是財富，你怎麼能輕易花掉呢？你太奢侈了。你不要擔心我兌換不起你，我富裕的很，你看我吃的喝的，哪樣不比你好？』邊說邊指著屋裡的一口袋一口袋的鳥肉乾說：『你看我有這麼多的財富，你還擔心什麼？我完全能兌換得起你，你不要擔心，我拿我的人格發誓，我絕對不違約。
可是你有什麼，你就是個窮光蛋，天天餓得直打晃，我看著都可憐。俗話說，越窮越賴，我倒擔心你的信譽呢。』老美說完，忽然感到說得不好，又立即改口說道：『當然啦，你只是表面上窮，實際上你非常富裕，你有那麼多的外匯儲備。你看我有什麼，欠一屁股債。我倒感覺你對我的天下第一富的地位有嚴重威脅呢。』
老華被他說得，如同一口喝了二兩老白乾，頓時覺得暈暈忽忽的。老美又說道：『這充分說明你這條路走對了。今後你還要繼續走下去，我們之間的貿易是互惠互利的。我們要共同富裕。
老華感激萬分，忙向老美表態：『您放心，我是個負責任的人，絕對不失信！』老美又指著老華手裡的錢說道：『既然這些錢被蟲蛀了，我就給你重新寫個債券吧。算是我借你的債，付給你優厚的利息，一年後還錢。』老華一聽，這個合算，就換了一張債券回去。他們的交易又正常繼續下去。
終於有一天，老華有點醒悟了。他想：『老美這個傢伙天天什麼活都不幹，吃的喝的，全都是我的，比我過得還滋潤，我得到的只不過是些樹皮。而他總是想盡一切辦法，編出各種理論不讓我兌換實物，如果不能兌換，就只能當柴火燒。算了，以後就不和他交易了。』
晚上，老美又拿3美元去買鳥。老華不給他。老美就說：『如果你不賣給我，我就得餓死，那麼你手裡的美元和債券就全廢了。你要知道，現在救我就是救你自己。』老華聽了，不得已，還得和他交易。究竟和老美還繼續交易不交易？老華愁死了，但是在他妻子面前還得裝作很英明的樣子。
轉眼一年過去了，老華的妻子翻出老美的那張債券，催老華去討債。還塞給老華一大包美元，讓他順便到老美家多買點東西。老華怕減少外匯儲備，不想買東西，兩口子為此事爭吵起來。老華的妻子嚷道：『不買東西，留這些美元有什麼屁用？今後不准你再要他的美元，也不准你再要他的債券！』
聲音傳到隔壁，老美嚇死了。對他妻子說：『我倒不怕他們來討債，我造錢還他就是了，要多少有多少。說實話，我根本就不需要向他們借債，不管買什麼，我直接造錢付帳就行。
其實，不管是我發出去的債券，還是美元，本質都是債券，都表明我欠人家的實物。而我之所以要向他們借債，就是演戲，讓他們知道我對造錢很慎重，不輕易造錢，我也不造錢買東西，以保持他們對美元的信任。
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