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-- Posted Monday, 25 April 2011 | | Source: GoldSeek.com
 The final chapter of Niall Ferguson’s new book and TV series entitled ‘Civilization: The West and the Rest’ was a disappointing conclusion to this masterly survey of world history and what it might have to teach us about the future. Perhaps it fell short because at the end of the road ‘Civilization’ lapses into a state-of-denial, and that is odd because Professor Ferguson is quick to criticise others for this failing (click here). You also see it everywhere among commentators at the moment. They really want to believe the future looks bright, even when it does not. Professor Ferguson’s research team examine the rise of the West and decline of the East over the past 500 years. Then in the past few decades the East plays catch up and in places like Singapore and Hong Kong per capita is now ahead of the US. China crisis? Mainland China still lags a long way behind but if you extrapolate its recent growth rates then it catches up pretty soon. That may just not happen. Japan was an overtaking candidate until 1990 when its economy blew up. China might well also reach its limits. Indeed, the bursting of its real estate bubble may have just started (click here). The final chapter of ‘Civilization’ was written at the end of 2010 when the strong medicine administered after the global financial crisis was believed by the consensus to be working. Perhaps that is why it shies away from earlier more apocalytic warnings from the prolific professor in his commentary articles. Then he looked hard at the global bond market, of which he is something of an expert as the historian of the Rothschild dynasty, the original bond kings. His conclusion was that bond bubbles invariably burst with spectacular consequences and from an investment perspective a rush into gold and silver which soars in price as a consequence. And what are we seeing in 2011 but a weakening of global bond markets. The modern bond king Bill Gross is shorting them (click here). And hedge funds and canny smaller investors all over the world are buying gold, and seem to have just discovered silver. Silver shines As an aside on silver it looks as though the ratio of gold to silver is being compressed as the metal quickly reverts to its historic role as a money that cannot be printed (although it can be laboriously dug out of the ground). That ratio is down from over 80 just a year ago to around 30 now. Maybe gold will be held back as the flow of money into precious metals is temporarily tilted in favor of silver. Only once silver gets to its centuries’ old ratio of 12-16 to gold will the yellow metal then be a target for investors, and after that both metals will move up in lock-step to the tune of global monetary inflation. But back to ‘Civilization’ and the reader can only wonder why the final chapter seems to miss this conclusion. It must be the timing of publication at the end of 2010. New black swans After the flock of proverbially discolored swans that have taken off in 2011 the last chapter might be a bit different if written today. That is the danger with trying to bring history into the present, the picture is constantly changing, and can fall victim to the latest Wall Street spin. For we have two entirely new mega-economic events so far this year. First the Arab Uprisings with their long-term implication for the price of oil; and secondly the Japanese earthquake and nuclear disaster with its impact on the world’s third largest economy. Meanwhile, the global debt problem that brought us the subprime crisis and global financial crisis has only gotten bigger. Professor Ferguson’s earlier warnings about bonds and precious metals not only still stand, they are about to be proven prophetic. Of course, civilization will not end, particularly for investors in gold and silver. The next edition of the ArabianMoney newsletter will present some ideas on how best to jump on the silver train, concepts that this free website will have to wait for while our subscribers cash in first (click here).
-- Posted Monday, 25 April 2011 | Digg This Article | Source: GoldSeek.com
Previous Articles by Peter Cooper
About Peter Cooper:
Oxford University educated financial journalist Peter Cooper found himself made redundant by Emap plc in London in the mid-1990s and decided to rebuild his career in Dubai as launch editor of the pioneering magazine Gulf Business. He returned briefly to London in
1999 to complete his first book, a history of the Bovis construction group.
Then in 2000 he went back to Dubai to become an Internet entrepreneur, just as the dot-com market crashed. But he stumbled across the opportunity to become a partner in www.ameinfo.com, which later became the Middle East's leading English language business news website.
 Over the course of the next seven years he had a ringside seat as editor-in-chief writing about the remarkable transformation of Dubai into a global business and financial hub city. At the same time www.ameinfo.com prospered and was sold in 2006 to Emap plc for $27 million, completing the career circle back to where it began a decade earlier.
He remains a lively commentator and columnist as a freelance journalist based in Dubai and travels extensively each summer with his wife Svetlana. His financial blog www.arabianmoney.net is attracting increasing attention with its focus on investment in gold and silver as a means of prospering during a time of great consumer price inflation and asset price deflation.
Order my book online from this link
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The end of Civilization and buying gold and silver
