Nov
10
Let us talk about gold for second, shall we?
Posted (Van Santos) in Business on November-10-2009
My post titled “The Coming Economic Storm” raised a number of questions from readers and the focus was on the movement in gold. My position is world governments moving money out of the U.S. dollar into something physical, a commodity, and gold is one of the resources where they are moving to.
One thing I did not place in my original post was WHY I started to hold this view, let me clear this up before moving on to backing up my position on government actions.
As the stock market recovered from from the March 2009 low I had expected to see the price of gold to move down; however, that did not seem to take place.  Traditionally, when there is uncertainty in the world – or in the U.S. markets – gold would increase in price.  When things would look “good” the price of gold would start moving forward. When it became apparent the price of gold was disconnected from stock market I started to think something else was up.
Now, why is it that I think world governments are moving into Gold and away from the dollar as an investment?
The IMF is selling 200 tons of gold to India
China is expected to buy 203 tons of gold from the IMF
And China has added 454 tons of gold since 2003
Russia may buy gold and cut rates
Gold if finding buyers outside of governments
And what is missing from this picture?  The United States buying gold for their reserves.
It is clear other governments are stockpiling gold, and as a result, other investments are not being funded.
What other investments have you watched fall over the last 8 to 12 months?
The U.S. Dollar.
Right now, it looks as if the U.S. Dollar is marching toward the end of reserve status.  The question is how long will it take.

My post titled “The Coming Economic Storm” raised a number of questions from readers and the focus was on the movement in gold. My position is world governments moving money out of the U.S. dollar into something physical, a commodity, and gold is one of the resources where they are moving to.

One thing I did not place in my original post was WHY I started to hold this view, let me clear this up before moving on to backing up my position on government actions.

As the stock market recovered from from the March 2009 low I had expected to see the price of gold to move down; however, that did not seem to take place.  Traditionally, when there is uncertainty in the world – or in the U.S. markets – gold would increase in price.  When things would look “good” the price of gold would start moving forward. When it became apparent the price of gold was disconnected from stock market I started to think something else was up.

Now, why is it that I think world governments are moving into Gold and away from the dollar as an investment?

And what is missing from this picture?  The United States buying gold for their reserves.

It is clear other governments are stockpiling gold, and as a result, other investments are not being funded.

What other investments have you watched fall over the last 8 to 12 months?

The U.S. Dollar.

Right now, it looks as if the U.S. Dollar is marching toward the end of reserve status.  The question is how long will it take.
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