John Hathaway tells King World News:
"... The fundamentals that led gold to trade briefly above $1900/oz. nine months ago are, if anything, more compelling and supportive than ever. These include, but are not limited to, sputtering economic conditions, intractable fiscal issues in all Western democracies, the slow motion demise of the euro as a credible reserve currency, a loss of faith in traditional economic prescriptions, alarm at the readiness of policy makers to resort to radical, ad hoc measures to buy time, and general disaffection among disparate social factions with the status quo.
"Traditional economic analysis seems to offer little to explain the contemporary social and economic drift. In our opinion, more enlightenment can be found in the study of complex systems and chaos theory. As explained by James Rickards in “Currency Wars”, systemic scale and risk correlate in a positive way. What works on a smaller scale does not translate to large systems.
"In large systems, “minutely small changes in initial conditions can lead to catastrophically different results.” The extrapolation of outcomes based on historical models and policy applications is a fruitless exercise. The evolution of Western democracy over many decades has resulted in a systemic structure that bears no resemblance to precedent. Rickards notes that “a phase transition from stability to collapse can begin in imperceptible ways based on tiny changes in individual preferences impossible to detect in real time. ..."