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I
In nature,
rhythm and cycles can in no way hide.
The phases of the moon, the flows of the tide,
the succession of seasons, the sound, beating heart,
all things ending near the place where they start.
Summer follows winter. Heat follows cold.
Day follows night. New moon follows old.
In motions then considered sometimes quite erratic
the universe moves, its nature not static.
From electrons to galaxies, all share this connection,
continually moving, but in changing direction.
All cycles do complete. And therefore their name,
turn back on themselves and return whence they came.
Revealed quite plainly, who cannot see such features
quite evident in the lives of plants and all creatures?
Though a nerve is touched off when anyone dares
to mention cycles that function in economic affairs.
The propensity to believe in an ever-rising tide,
inevitable progress that does not subside,
holds tightly within us in some guarded place,
too familiar to question, too painful to face.
New York Stock Exchange President, Ed Simmons, way back in ‘29,
the very month that things peaked was sure all would be fine.
Bravely announced to all that no matter what history had shown them,
“We are finished with economic cycles as we always have known them.”
How about the Japan Times, December ’89? Recall if you can.
“Classic theory of business cycles no longer applies to Japan.”
“We’ve minimized those factors that bring instability.”
“We’ve learned to drive slowly and with supreme agility.”
The Nikkei hit its peak at just under thirty-nine thou.
It’s under eleven hundred if you look at it now.
Yes, few are the fields of human pursuit
That like finance hold cycles in such low repute.
Experience to be gleaned from our ancestors’ plight
is looked down on by those who claim much greater insight,
who live in a period they feel much more enlightened
and of cycles do not have the time to be frightened.
Though the rhythmical rise and fall of any human undertaking
is indeed the story of human history in the making.
The rise of prosperity, the sting of depression,
events all proceed in their natural succession.
Economics and markets respond to natural law.
No meddling of man slows time’s fated claw.
No always-uptrending journey can we claim we’ve begun.
No “new thing” we’ve found that is under the sun.
Like the slow moving planets or the great roaring seas,
markets are subject to their own gravities.
As air to the lungs gives that cycle its drive
money and credit keep financial markets alive.
II
All markets meet crashes; Von Mises has said it.
The primary reason: the misuse of credit.
When credit expands to no standard tied
it becomes fiat in nature and soon spreads far and wide.
With greater expansion misuse is fated
as to projects unnatural it’s soon allocated.
And men of all stripes soon share the delusion
that things grow forever with a greater credit infusion.
Will a tree grow to the moon with more fortified soil?
Or a “perpetual” engine run with higher quality oil?
Then why believe men today that more borrowing can solve
problems that through history such plans never resolve?
The Great South Sea Bubble, John Law’s Mississippi Scheme,
Tulip Bulb Mania for a time all did seem
to be never-ending summers of days always sunny,
each utterly reliant on abundant credit and money.
But when comes that day when credit no longer can climb?
Panic sets in at moments no man can time.
Credit contracts like a lung breathing in
to bring itself back to the place where it once did begin.
III
But men die not quietly, pushing hard at the game.
More and more money, increasing credit just the same.
Can a panic be halted once indeed set in motion?
Anymore than the tide can be changed by the ocean?
The cycle completes, but few comprehend
destruction of credit is what signals the end.
As dusk brings on the night, and seasons, the year.
What’s named “quantitive easing” means the finish is here.
We shall see now indeed the self-proclaimed have no power
to stop this contraction with a monetary shower.
How reckless they’ve become, ignoring lessons of old,
Spirits of great ancestors, whispering, “Silver and gold.”
And what then of gold with this character quite funny,
that during slow growing inflations functions much less as money?
When all comes crashing down as a cycle breathes in,
gold’s function has always returned to money again.
Why this has happened, I’m not fit to say.
Nor why dawn follows night to bring the start of each day.
Or the motions of bodies as gravity applies.
But everything that grows, for certain, ages and dies.
And why then has man returned in ages untold
in times of collapse to this hunger for gold?
Its color? Its purity? Its freedom from rust?
Some hidden, great power that mankind can trust?
I cannot here tell you. Again, no answer have I.
Only that wherever a tree falls, there does it lie.
IV
The Great Teacher once spoke as He stood there alone.
“The stone the builders rejected becomes the corner stone.”
And how brave we are indeed to reject gold even when
It has been that true cornerstone again and again.
Do you know then where you are? Do you know the time?
When a three dollar trade buys a Mercury dime.
When money made of nothing every man craves to hold.
Best get you some silver, friend. Best get you some gold.
Alan Lemerande
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Dr. Al Lemerande is an emergency room physician, gold investor and freelance writer, and he hopes you are having a great day.
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