Greaser,

The recent use of gold trade for oil, means something.

There is a summit of the BRIC countries in Brazil on June 20-22,(I believe those are the dates if I remember correctly). This summit will have talks on gold and currencies. IMO, it will be a very important summit in terms of discussing how business will be done in the future.If such things as a new currency backed by gold becomes one of the highlights, or any gold related trade, this will increase the POG. The IMF will be most likely forced to increase its gold holdings as will all countries as a protective measure. We already see the countries continuously increasing their gold, and financial institutions may have to do their part to back lending in case of default.. I am 100% with you on how the global economy cannot sustain the government prop ups. The problem is that it became to complicated, had it remained simple, we most likely would not have been at this stage in world economics. What is happening now, is a huge lesson being learned. The outcome depends on some big decisions with the society as a whole given the utmost consideration. To deny the general population would speak of rebellion. We are at one of the most crucial pivot points in global economics ever, if not handled properly, with greed set aside, this could possibly lead to war. There has to be a balance in the world powers also,when this balance changes, as is now happening, so many unthinkable things become possibilities.

Gold will undoubtedly play a big part in any comprimising, but is not by any means the solution, it will only be part. The biggest thing being kind of shelved here is the importance of oil. The only reason oil remains at these low prices today is because the world economy cannot sustain the inflation that comes with higher oil prices. In the future, gold and oil prices will go in contango with each other. There comes a time shortly when these cannot remain in check price wise because of the current power struggles. The power struggles will not go away under the premise, why should one country pay anothers debt? The everyday joe has no idea how fragile society is at this time, sure they see inflation, but have no idea its being kept in check at a losing pace.

IMO