Resource World Magazine

14 www.resourceworld.com A P R I L / M A Y 2 0 1 4 Except for the recent pullback, since late January, gold prices – some gold stocks too – have been rising. Good news after a very disappointing 2013. Resource World recently interviewed Ian Gordon, found- er and Chairman of the Longwave Group, an economic and market analysis orga- nization. Gordon is a respected speaker, author and economic forecaster. According to the organization's web- site, the Longwave Principle is based on the belief that the Kondratieff Cycle, de- veloped by Russian economist, Nikolai Kondratieff, in the 1920s, repeats itself over time. While the Kondratieff Cycle applies to past events, the Longwave Economic and Financial Cycle looks at multiple factors to determine where we are in the present and projects into the future. "Everything that we write about and every investment decision that we make is governed by how we interpret that cycle," explained Gordon. Resource World: Why does the US government keep trying to suppress the price of gold? Ian Gordon: We are living in an age of fiat money and the US dollar is the su- preme currency in that regime. All com- modities are essentially paid for in US dollars so that all other countries have to utilize US dollars to pay for the commod- ities that they buy and sell. If the US dol- lar continues to go down in value against gold, then it is sort of a condemnation of the paper dollar. The US government is determined to convince people that the dollar is effec- tively good as gold and, therefore, when- ever the gold price starts to rear itself up, they try to suppress it by making what they hope is a convincing story on behalf of the dollar. RW: Is this strategy futile in the long run? IG: I am absolutely convinced that it is. I think that we are living toward the end of the fiat paper money system. One could argue that it has been ongoing for a hundred years – since the outbreak of the First World War in 1914 when most world currencies were on a strict gold standard system. They went off the gold standard when the war broke out. [Countries resorted to inflationary policies to finance the war and, later, re- construction. In practice, only the US re- mained on the standard during the war. – World Gold Council] There were some attempts to bring back the gold standard after the war, but they were not true gold systems. The whole monetary system effectively col- lapsed between 1931 and 1933. A new system was cobbled together in 1944 with the Bretton Woods agreement that made the dollar the world's reserve cur- rency. At that time, of course, the dol- lar could be convertible into gold at US $35 an ounce; but only by countries. The American people themselves were not allowed to own gold. There was a semi-standard gold system put in place at Bretton Woods where the dollar was fixed at US $35 an ounce. [The Bretton Woods Conference, formal- ly known as the United Nations Monetary and Financial Conference, was the gath- ering of 730 delegates from all 44 Allied nations at the Mount Washington Hotel in Bretton Woods, New Hampshire, to regu- late the international monetary and finan- cial order after the conclusion of World War II. – Wikipedia] RW: With the price of gold being manip- ulated, is it possible to predict the near- term price? IG: It is difficult. I believe that not only Gold looking bullish By Ellsworth Dickson There are reasons to believe that gold prices and gold stocks will keep increasing in value.

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