|
|
 Traditionally, there are many variables
that have affected the price of gold in the market place. Here are some
fundamental guidelines:
-When the US Dollar goes up, Gold goes up
-When stocks go down, Gold goes up
-When oil goes up, Gold goes up
Because there is so much volatility in the market place today and signs show
we are in an inflationary period, the rules above no longer seem to really
apply and the gold market has now taken on a life of its own.
There are other things that affect the price of Gold like knee-jerk reaction
buying and selling based on fear and greed. Collapsing currencies, countries
going bankrupt, rumors of war and war, etc. have always affected the price of
Gold. People flock to gold as a safe haven during these times.
Of course, there is also the long-term manipulation of the price of gold. The
spot price of gold and silver have been manipulated and suppressed for many
decades by the central banks, governments and JP Morgan. This was something
that was dismissed as conspiracy theory bunk only a year ago and now that the
Andrew McGuire story broke through to the international main stream media,
thanks to Bill
Murphy
of GATA, it is being accepted more
and more as fact throughout the world.
Recent comments by the media and people such as George Soros
that gold is the ultimate bubble seem asinine to me when you
consider the following:
- Federal Reserve and other central banks printing money (out of control)
causing inflation.
- Gold for millennia has been a safe storage of value – Historically,
all civilizations and cultures go back to gold after they debase their
currencies. Washington is allowing the Federal Reserve to print money into
existence and there are no signs on the horizon that this will end or slow
down.
- If you look at any historical gold chart, gold has risen with small
corrections and pull-backs along the way and in the big picture, steadily
climbed. This is a classic sign that gold has been chronically bullish with
no bubble in sight.
- Basic Supply and Demand Fundamentals: There is less than 1/2 an ounce of
gold above the ground per person alive on the planet right now. What does
that mean when failing currencies prompt everyone at once to turn to
something more sound?
- Jim Rogers was quoted that he is not
selling any of his gold. If gold goes down, he’ll buy more. If it goes
up, he’ll still get more. He is certain that due to the imbalances in
the world economy and financial system right now, we are heading towards a
currency crisis in the next year. Does this sound like the actions of someone
who has heavily invested in a commodity that is in a bubble status?
- China has already said that their demand for gold will double in the next
10 years. Is this bubble talk?
- Looming
currency crises globally - You cannot open a newspaper or turn on your TV
today without being told about the declining Euro and other failing
currencies. This will become more prevalent in the media in the coming
months.
Finally,
because we know gold is inflation-proof, we know that the price of gold isn't
actually going up or increasing in value, it is the value of the dollar that
is decreasing. An ounce of gold purchases the same today as what it did 2000
years ago. It is the purchasing power of the dollar that is decreasing.
As Simon Heapes
said “You cannot study the subject of Gold and Silver without studying
its counterfeit, that being the world’s paper currencies.” Simon
also recently reminded us that “Taking time to study history gives you
the "jump on the crowd." History repeats. Consider King Solomon who
said, "There is nothing new under the sun, that that is, is that that
will be again." This is particularly true with markets and the emotional
reactions of the crowd”.
In history, we have learned that in times of economic hardship and despair,
there is also great opportunity. Ask me how you can participate and position
yourself for the “Great Wealth Transfer”, which will accompany
the looming financial crash.
Kirsty Hogg
Gold Wars
|
|
