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The Causes for the Major Leap in Gold Prices
The Causes for the Major Leap in Gold Prices
I talk to folks of every walk of life every day and they all ask me why is Gold so high
I have to reflect on the state of our economy and the world economy especially in China. The US Economy has taken a severe down turn in the past year due to several mitigating reasons. I believe the biggest is the secondary housing market and all of the very bad loans written on the behalf of greed. The secondary housing scandal is nothing more than junk bonds in disguise and they are being passed off on the American public as bad investments. I firmly believe that we have not yet seen the tip of the iceberg. When foreign banks are taking severe write offs due to there own greed and that of there American banking cronies the international economy is on the road to perdition.
The Chinese on the other hand have stopped trying to sell there way of life and political beliefs to the rest of the world and are now only concentrating on there own economy and what a job they have done. They have found the key to come roaring out of the dark and into the dawn of a new day. There economic power is growing and roaring like a dragon never seen before, their peoples now have expendable income and they are westernizing and becoming consumer driven 3 billion people and counting. Now on the other hand realizing that gold is traded in dollars and looking at the state of the dollar at this time, it is no wonder we are in such bad shape and that gold prices are at record highs. There was a time that the price of gold moved with the price of oil and the condition of the dollar. That is not so much true any more about the only time that gold is affected by oil is when the price gets over inflated with super high prices and has nothing to back it up. Now the American dollar affects the price of gold everyday. When the dollar gains in strength, the price of gold drops as investors go looking for other safe havens. But the same is true when the dollar acts in reverse the price of gold can sometimes jump dramatically in price. It has been all over the news lately that the Feds have cut interest rates ¾ of a point and will cut again later this month. I do not believe that this will help the state of the economy nor will the suggested tax rebates, if they happen. I believe that they are only a band aid being applied to a severed artery. What our country needs is a true working economic package, not stop gap measures and quick fixes. This is not a short term problem, it is going end up being a long drag, but if it is done properly the state of the US. Will be terrific and the price of gold will fall back rates that are not hyper inflated.
