Friday, 23 September 2011
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1) Economy
The U.S. manufacturing base has been shipped overseas. The few jobs being created are in the service industry or government sector. The official unemployment rate hovers near 10%, and 1 out of every 8 Americans is on food stamps. The 2008 economic implosion destroyed the real estate market, sent foreclosures skyrocketing, and swallowed up a nearly $1 trillion bailout... and yet, most experts predict the worst is still to come.
The U.S. manufacturing base has been shipped overseas. The few jobs being created are in the service industry or government sector. The official unemployment rate hovers near 10%, and 1 out of every 8 Americans is on food stamps. The 2008 economic implosion destroyed the real estate market, sent foreclosures skyrocketing, and swallowed up a nearly $1 trillion bailout... and yet, most experts predict the worst is still to come.
2) Fear
The sovereign debt crisis threatens to spread across the globe. Fearful investors are shifting assets from the euro and other weakening currencies into gold. The stock market rebounded from its 2008-09 depths, but some analysts say it's overbought and due for painful correction. Meanwhile, turmoil across the Middle East, Asia, and elsewhere is exacting huge costs in American blood and treasure.
The sovereign debt crisis threatens to spread across the globe. Fearful investors are shifting assets from the euro and other weakening currencies into gold. The stock market rebounded from its 2008-09 depths, but some analysts say it's overbought and due for painful correction. Meanwhile, turmoil across the Middle East, Asia, and elsewhere is exacting huge costs in American blood and treasure.
3) Demand
The Federal Reserve has kept U.S. interest rates at virtually zero with no sign of a hike on the horizon, thereby lowering the opportunity cost of buying gold. And investors have responded with astonishing eagerness — even forcing the U.S. Mint to ration popular bullion products in order to meet overwhelming demand. Expect central banks in China, India, and Russia to fuel demand for gold.
The Federal Reserve has kept U.S. interest rates at virtually zero with no sign of a hike on the horizon, thereby lowering the opportunity cost of buying gold. And investors have responded with astonishing eagerness — even forcing the U.S. Mint to ration popular bullion products in order to meet overwhelming demand. Expect central banks in China, India, and Russia to fuel demand for gold.
4) ReflationOf
the major assets, only
Treasuries and gold have escaped the selling panic that has gripped the
markets. Rushes on gold have caused mints around the world to run out of
popular gold coins. Because of the inflationary impact of government
bailouts, $2,000 could be the floor, not the ceiling.
5) The DollarDollar
weakness, plentiful
liquidity, and policy reflation will be persistent themes in the future.
Massive fiscal and monetary stimulus have weakened the dollar, whose
current
resurgence stems mainly from the European debt crisis. Once that crisis
reaches the debt-burdened United States, the dollar's weakness as a
currency
will be evident to all — and its role as the world's reserve currency
will be in jeopardy. As always, gold will be the first and most
universal remedy.
Category:
Gold Saving / Investment
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