There the gold and silver prices were behaving themselves for a change, when out comes the non-farm payroll report.

September 02, 2011 – There the gold and silver prices were behaving themselves for a change, when out comes the non-farm payroll report. Still holding hands the gold and silver spots shot up as stocks tumbled. Just what you’d expect from news of no net job gains for an entire month, is it not?

But the comes as no surprise – or at least it shouldn’t – so what makes today so special? Maybe it’s just that denial is breaking down. But even at that, the Wall Street Journal is soft-pedaling its report. Stocks are down, they say, because of fears that we are “heading for a recession.” Then they buffered the downside when “stocks pared some early losses.” But the overwhelming sentiment among Americans is that we never got out of the last recession, and about half of us feel we are heading into a great depression. They all have it wrong.

For some time now the Daily Reckoning has been beating the drum, trying to wake us all up to the fact that we are in a “Great Correction.” We built our economy on false premises and inflated it to the bursting point leveraging credit. You just can’t fix that, and trying can make matters only worse.

Corrections are simply the fundamentals putting things right. The best thing we can do in a correction is back off and let Mr. Market do his job. He’s going to do it anyway with or without our blessing, and our interference serves only to put him in a very ugly mood.

Thinking in terms of an approaching second dip is extremely dangerous. It carries with it the notion that things can still be patched up. And who do you call to fix it? Bernanke and the Fed, the Keystone Kops of fiscal control.

So while gold and silver may put in a fairly decent day today, and the stock market may get bruised, we are not even close to where we should be. Big money isn’t about to back out gracefully, not while there’s even a smidgeon of blood yet to be drawn. Once again (and again and again) the Fed will submit to peer pressure and concoct some scheme that flies in the face of reason. And our quality of life will keep deteriorating.

Unless our government gets serious about turning down the heat the pressure will continue to build. And someday it will have to blow. That’s not a pretty thought, but it is real. Fortunately, for those with the vision to see it, that dark cloud will have a gold and silver lining.

Shannon King

Senior Staff Writer –

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