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Top Five Reasons Why Gold Bullion Prices Will Move Even HigherBy: profit confidentialArticle Word Count: 465 words [Comments (0)] Total Views: 1 Views |
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Here are our top five reasons why we believe gold bullion prices, far from being in a bubble, have much higher to move. (Also see: Answered: Can I Still Make Money Buying Gold Now?) Few investors are aware of the bull market in gold bullion that started in 2001. If we were to take a survey of retail investors, our best guess is that less than five percent at this point have purchased gold mining stocks or gold producing stocks. Few investors understand how the actions of the government and the Federal Reserve are resulting in the price of gold bullion rising. The U.S. dollar, a fiat currency once issued by a creditor country, is now issued by a debtor country. The U.S. dollar is the reserve currency of about 70% of world central banks. As the debt of U.S. has spiraled out of control, the currency of America, the dollar, has gone from a system where it was once partially backed by gold bullion reserves to a currency that is mired in debt. The monetary policy of the U.S. has been to expand the money supply, create more dollars, to keep monetary policy expansive. Economics 101 dictate that the more of anything there is in supply, the less the eventual demand. The U.S. dollar is not exempt from supply/demand rules. Too many dollars in circulation? What other currency can investors run to when the U.S. dollar gets into trouble? The euro is finished, the yuan isn’t ready. Gold bullion is the only alternative. Inflation, in our minds, will be a huge problem for Americans in the months and years ahead. Too many dollars continue to be printed, short-term interest rates are near zero for five years, the Fed buying U.S. Treasuries…how can inflation not rise? Or perhaps this is a better question: Hasn’t the 10-year-old bull market in gold bullion been warning us about inflation? (See Economic Analysis: And Then Came Rapid Inflation.) Financings on the TSX, the Canadian-listed exchange, which is a hub for gold mining stocks and gold producing stocks, plunged 50% in October 2011 from October 2010. Financing for gold mining companies is far from booming. During periods of bubbles, like we saw with tech stocks in 1999, companies in that sector are out raising big money in the markets. This isn’t happening with the gold mining companies. More details visit on:-Economic Analysis Author InfoFor more details visit us: - Why Stocks Will Rise as the Economy Deteriorates Further and profit confidential Grab this articles
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