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Gold Reaches One Month Low

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  • Gold Reaches One Month Low

    Good news everyone. Gold has reached a one-month low. In fact, February gold futures on Comex fell the most in six weeks. They tumbled four percent on the day, down US$34.

    This is very good news. It means you will have a chance to buy gold at lower prices before it goes up higher later this year. Much higher, in fact, according to the 2009 forecast made by Diggers and Drillers editor Al Robinson. Look for Al's special gold forecast issue later today in your in box.

    Not everyone agrees that gold is going higher, mind you. "The deflationary scenario is still incredibly intact, even though the government has thrown trillions of dollars at it," one Leonard Kaplan told Bloomberg. Kaplan is the president of Prospector Asset Management in Evanston, Illinois. "Gold has a long ways to go down," he added.

    Daloob. Seriously daloob. Daloob is a word that means whatever you'd like.

    But what does it mean to say that the deflationary scenario is "incredibly" intact? Does this mean that the scenario is "not credible?" Or does it mean the scenario explains and predicts what's ahead? The statement is incredibly opaque.

    Either way, the deflationary scenario that Kaplan refers to is worth a few lines. The scenario is one where commodity and stock prices fall as the credit depression gets its hands around the neck of the economy and squeezes. Under that scenario, gold would fall. And under that scenario, the cost of paying off debts would rise massively as cash gained value. Old debts would become economy-killing burdens for households, businesses, and, dare we say it, governments too.

    In fact, the real economic consequences from this kind deflation are so destructive that we would bet our left big toe that the Federal Reserve is going to do everything in its power (and perhaps some things not in its power) to prevent it. It's not a risky bet. The Fed is firmly moving down the path to monetary weirdness. We are well and truly down the rabbit hole in 2009.

    Read more...

    Cheers

    Marc
    Free business resources - www.BusinessBlogsHub.com

  • #2
    Gold is a monetary commodity. That means it does not move in the same way as the other commodities like copper.
    IMO, as it has been doing in all but relative to the US$ and Yen, it will do well in a monetary deflation or inflation, as it acts as a safe haven for the former, and protection against the latter.

    Comment


    • #3
      Originally posted by Steve Netwriter View Post
      Gold is a monetary commodity. That means it does not move in the same way as the other commodities like copper.
      IMO, as it has been doing in all but relative to the US$ and Yen, it will do well in a monetary deflation or inflation, as it acts as a safe haven for the former, and protection against the latter.
      Hey Steve,

      Do you have a blog or web site where you provide your awesome advice? I want to add it to the daily news and on www.BusinessTalk.co.nz

      Cheers

      Marc
      Free business resources - www.BusinessBlogsHub.com

      Comment


      • #4
        Originally posted by Marc View Post
        Hey Steve,

        Do you have a blog or web site where you provide your awesome advice? I want to add it to the daily news and on www.BusinessTalk.co.nz

        Cheers

        Marc
        Thanks Marc, but I disagree about the word "awesome"
        I post my views, which evolve over time, and may be right or wrong.

        I currently only have a small emigration forum, where I 'blog' about economics stuff, which does not have any feeds. I am in the process of moving, which will take a few months. When that is complete, if you like, I can let you know.

        Steve

        Comment


        • #5
          Thanks Steve - please do tell me when you have a RSS feed.

          Cheers

          Marc
          Free business resources - www.BusinessBlogsHub.com

          Comment

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