For the past number of days, gold bullion has appreciated to above $1000 an once. In the previous 3 years, this level had been a limit, or ceiling so to say, on the price action. Gold sustaining above this limit for a number of days now, and trading violently to $1050 is a strong signal that it will go MUCH higher. Targets of $1200, $1500, and $2000 an once are being tossed around. Gold is appreciating because the yellow metal is an alternative to holding US Dollars. While the Federal Reserve and US Treasury have cut interest rates to 0% and flooded the monetary system with stimulus and accumulated massive debts to do so, some have grown distrustful of the sustainability of the dollar as a store of value. I speculate that the Fed may need to keep interest rates at close to zero for some time in order to see the job market come to life. If that is the case, all of us should be holding some 3-10% of our net worth in gold. If you don't want to actually own the metal (you have to pay to store it somewhere). Here are a few alternatives: Buy GLD which is a gold bullion ETF that actually holds physical gold in a trust to back the share value. Or you could own a mutual fund which invests in the Gold Mining companies. These companies not only produce gold but own land and mines that have gold in the ground. Two which have reasonable fees are: ProFunds Precious Metals Fund (PMPIX) - which uses 50% leverage. Second, Tocqueville Gold Fund (TGLDX) which uses no leverage.
Moreover, If you are a hip hop gold aficionado, keep the gold in your teeth and hold tight to current levels of jewelry. It will appreciate and others won't be able to afford soon. If you are a piece of ass "Gold Digger" don't pawn your stash and keep at what you are doing. Switzerland, you are in good shape - this is the country with the largest per capita holding of gold of the top 10 holders.
Savvy investors of all sorts will benefit from the governmental bailout shit show we have found ourselves in and the corresponding super-extreme policy responses.
2 comments:
Futher proof that Ron Paul is the only politician without his head up his own ass.
Hey Obama, want to start looking like you know what you're talking about. Start predicting things for the future that Ron Paul predicted years ago.
Solid points/concerns, though much of this mess of a situation falls on the Greenspan Fed as well as the policies the Bernanke Fed has adopted to fight through the credit/housing bubble burst.
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