ON TUESDAY the price of gold hit a record high of $2,000 (£1,530) an ounce, an increase of more than 30% this year.
According to analysts at the Bank of America, gold prices will surge by a further 50% to $3,000 an ounce in the next 18 months.
The significance for the working class of this massive price increase in gold is that it is a very clear indicator of the catastrophic crash of capitalism internationally that is now well underway.
In times of acute economic crisis, investors flock out of paper currencies, and seeking value turn to gold. They dump investment in shares and refuse to place their money into government bonds which were previously regarded as a safe bet.
When capitalism appears on the surface to be booming, gold is treated as a stupid investment as it produces no interest.
Today however, with interest rates close to zero and in some cases dipping into negative rates, investors are leading the charge to buy up as much gold as possible, driving its price into the stratosphere.
This week has seen the US economy, the biggest economy in the capitalist world, enter its greatest ever crisis. Its total Gross Domestic Product (GDP) collapsed by 32.9% in the biggest crash in America’s history – it is small wonder that the investment sharks are running scared.
The UK is similarly gripped by a slump, with the Bank of England predicting the worst recession in 300 years.
Capitalist international investors clearly see that there is no safe monetary bolt-hole in this crisis of industries and businesses collapsing, along with the banks going under, beneath a mountain of toxic debt, with even the mighty US plunging into bankruptcy.
The working class is now facing a bankrupt capitalist system that can only survive through imposing its crisis onto workers. It is at this moment that we see the essence of the reformist trade union bureaucracies.
The trade union leaders are now working flat out to soften workers up so that they can betray them into accepting the inevitability of mass unemployment and pay cuts to ‘save’ capitalism, and that the aim of the struggle is to try and reduce the size of the sacrifices that the working class has to make.
Nowhere has this been more clearly demonstrated than in the actions of the biggest union, Unite, over the attack on its members by BA.
Yesterday, BA told 42,000 of its workers to either accept a pay cut of 20% or get kicked out under a ‘fire and rehire’ ultimatum.
The response of Unite leader Len McCluskey was to beg BA to instead offer his members the same deal offered to pilots which involves a ‘temporary’ 20% pay cut which is supposed to reduce to 8% over two years.
McCluskey has criminally betrayed Unite members and the entire trade union movement, trying to transform ‘his’ union from an organisation fighting for its members into a union whose function is to lead workers to surrender their pay and jobs without a fight.
Under the slogan ‘nothing can be done’, Unite is trying to convince the working class that it is powerless in the face of the capitalist crisis and the best workers can hope for is to cling on, accept pay cuts and sackings and pray that capitalism recovers. The trade union bureaucracy has more faith in capitalism than the capitalist class, who do recognise an economic crash when it hits them.
Yesterday’s demonstration by Unite outside Heathrow airport summed up the spinelessness of these leaders. Instead of a call for industrial action to defend jobs and pay it was restricted to banners begging the Tories to ‘stop betraying Britain’ and come to the aid of BA.
This real betrayal is by union leaders who have accepted the role that the ruling class has reserved for them – to come to the aid of capitalism by seeking to demoralise and divert workers from rising up in revolutionary action.
What is clear is that the working class is infinitely more powerful than this bankrupt capitalist class but it can only realise its power by kicking out the class traitors in the leadership of the unions and replacing them with the revolutionary leadership of the WRP. Then the working class will be able to take the power and history by the scruff of the neck.
Don’t waste a moment. Join the WRP today!