On the Verge of a New Monetary Order and Gold’s Rise
By Hubert Moolman
Wednesday, 24 April 2013
The last three major bull markets of the Dow were followed by some type of economic crisis and a major bull market in gold. This is no coincidence, since these massive bull markets have been mostly driven by the huge expansion of the money supply. When this expansion of credit is exhausted, which always happens, the confidence in all things (like stocks) inflated by this expansion of credit fails, causing a massive economic crisis and a rush to gold. We are still in the midst of last one’s crisis.
It is the Dow’s last two bull markets that are of interest due to the significance, of how they relate to the current monetary system. In 1944 a new global monetary order was established with the Bretton Woods agreement. The world had just come out of the Great Depression, and was completing the Second World War.
The creation of the new global monetary order as well as the new world order that came as a result of the war was indeed a fresh start. The Bretton Woods system brought about an international basis for exchanging one currency for another. It also led to the creation of the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (World Bank).
The member states tied their currency to the U.S. Dollar which was in turn pegged to gold at a rate of $35 per ounce. The U.S. Dollar became the world’s reserve and premier currency. The Dow had just started a bull market, and it was with this new created order that it would rise to new highs.