3 Sunday Morning Thoughts – May 25 Edition

Written by Bryan Lutz, Editor at Dollarcollapse.com:

Every Sunday I like to take time to reflect on what’s happened over the past week, and then share it with you…

So I get up, sit down and start typing.

Sometimes these thoughts end up being about life, other times they are on gold, geopolitical issues effecting the markets, or the economy.

Here are three thoughts for this morning:

1. Congrats to Poland. They’ve made the cover of this month’s “The Economist.” They’re calling it a remarkable rise. In fact, it is nothing new. It is amazing how smooth and utopic socialism can sound until it goes too far. Then we know something needs to change. Here’s what happened.

Congrats Poland…!

Here’s what happened.

In 1989, Poland’s shifted from a communist command economy to a capitalist market economy.

Out of the collapse of their communist economy can The Balcerowicz Plan, a bold “shock therapy” reform, which meant liberalized prices, privatized state enterprises, and free trade.

Despite initial unemployment and hardship, their economy slowly started to turn around.

By the mid-1990s, Poland’s economy grew rapidly, becoming a Central European success story.

Integration with the West, including EU membership in 2004, boosted investment and growth.

These industries prospered:

IT and Business Services, Manufacturing, Energy, Automotive, and Pharmacetical manufacturing.

Here’s a look at Poland’s GDP per capita rivalling the world’s third largest economy, Japan.

It is amazing to me how smooth sounding the promise of socialism can sound until somehow gets too big.

Here’s how amazing socialism sounded from the lips of Hitler (recently translated into English via AI).

2. The innovations happening as a result of AI are numerous. Sometimes they’re just fluff though. Three days ago, Google unveiled its live video conference translation service. You can now talk to people who can only know how to speak their other languages. Is this fluff?

Here are a few thoughts:

a. It’s not fluff for people who want to talk to their foreign grandparents, or relatives.

b. Real-time translation could replace the need to learn english to engage in commerce, and the need to learn some other emerging dominant culture.

For example, the more real-time translation happens, the more trading can occur across ethic and linguistic lines, and the less important it is to learn English to make money.

c. But will all this actually work?

Language is the bedrock of culture.

And cultural understanding is almost necessary to make certain trades happen, even market certain products.

Imagine making a social gaffe and never even knowing why you couldn’t close the deal?

After all, you both heard each other’s words.

3. Bonds are the best indicator that there’s a “Canary in the Coal Mine.” Now that gold is outperforming treasury bonds by the largest margin in the last two decades people are getting scared, but indicators in the stock market have been there for a long time.

Gold bugs are excited about the price of gold.

Mostly because the market is proving the thesis right.

And that thesis is, gold is money.

Fiat is not money.

Gold is money.

And bonds are the best indicator.

Here’s a look at the Gold to TLT ratio:

But stocks come first, which are influenced by much more than the value of the currency, national debt, and auction sales.

In fact, early warnings signs have been going on for much longer than the last several years.

Early warning signs have been flashing red since the “dot com” bubble at the turn of the century.

Gold’s been outperforming almost every year since.

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