Will Silver and Gold Climb?

The answer to most of your questions is a resounding YES, except for the one about silver and gold. People from India, for example, have been going to Dubai for decades for the express purpose of buying gold. This is tradition. It is not new. The value of gold is a constant. Only currencies fluctuate – up or down. If the dollar, the yen and the euro implode, gold will not be of much help. Neither will property (unless you are actually living there).

I recall my mother telling me about fleeing the Russian advance during WW II. They'd packed all their valuables into wagons and headed west. All along the wayside, she remembers seeing the carcasses of dead pack animals strewn; along with the 'valuables' people had discarded in an effort to lighten the load. Nobody thought it a smart idea to stop and load gold candle holders or silverware onto their own carts.

Currencies are the only thing capable of gaining in value. It depends entirely on the work and productivity of the people they represent. If a government hinders people from working; if it smothers productivity; if it runs up too much debt; if it prints too much paper; if it taxes too much and makes it unprofitable to work; if it insists on shifting value from productive sectors to unproductive sectors - everything that we are currently doing - the currency will fail and the disaster will be more than just economic. This is why socialism/communism cannot work on a societal plane of higher complexity than the single family unit.

Dubai: A Cautionary Tale

What’s happening in Dubai exposes the fundamental problems that exist in many (if not all) of the oil-rich Middle Eastern nations. It should also serve as a cautionary tale for the U.S.

Dubai’s vaults are said to be bursting with gold and foreign currency; the UAE sits on a virtual sea of ‘black gold’ – all of it valueless. For decades the country has survived in gaudy opulence off the sweat on the backs of foreigners – mostly people from the Indian communist state of Kerala - who were restricted from integrating with the broader Arab society. UAE citizens themselves do not work. Work is beneath them. They subsist off of oil revenues that the world sends them by the buckets. Whereas the world uses ME oil in the furtherance of work (building/creating…), Dubai simply pays others to do what needs doing.

These ‘others’, mostly Indians…, send the bulk of their earnings back home where it is used to sustain families in a communist state that cannot provide sufficient work for its own people.

This Dubai snapshot should settle the argument about the definition of ‘wealth’ once and for all. Wealth is not gold, oil or currency. It has little to do with ‘social justice’. Wealth without ‘value’ is nothing. And value can only be derived from human work. Any people who devalue work, or create so many obstacles as to make work impossible; any nation that diverts the just rewards of honest work by erratic, self-serving re-distributionist policies will end up with nothing.

During WWII, parts of both, Germany and Japan, were physically bombed into oblivion, their populations decimated. Yet, both countries had a work ethic which bombs could not destroy. In relatively few years, both countries were back on their feet. Look at Dresden today; look at Hiroshima!

The desert will reclaim Dubai once the West no longer has need of its oil. America will revert back to the wilderness it was before the pilgrims came should it persist in reducing education to mere propaganda (and cult worship); making work unprofitable; punishing exceptional talent or effort outright; creating a sheep-like mentality in a people who would otherwise bust their britches in trying to outdo each other .

Most of the Indian workers in Dubai have been sent home. The communist state of Kerala still does not have jobs for them. They will fan out across the subcontinent to find work – not at Dubai’s generous rates but enough, perhaps, to put food on the table back home – and the hollow, reverberating social fallout of fatherless houses will continue.