Gold Bubble Driven By Inflationary Concerns

March 23, 2009 | By | Reply More

Gold stays firmly in the news as today’s’ ‘Prudent Bear’ financial column in the UK’s  Daily Telegraph and written by Martin Hutchinson suggests that ‘ a gold bubble driven by inflationary concerns may (now) be inevitable.’

Quantative easing, politico speak for money printing, is having its inevitable effect on the dollar, pound and Swiss franc as they decline against currencies that have yet to embrace this questionable economic cure, although the Euro has so far not yet succumbed to the temptation.

We don’t know how long for, but sooner rather later seems a safe bet.

This pressure on three leading currencies, with one likely to follow, is likely to be reflected in continuing interest in the wealth preserving virtues of gold.

Furthermore the undermining of the US dollar as the world’s reserve currencies is getting underway with no sign of any response yet from Capitol Hill.

We could only stand back in awe at a comment made on Bloomberg by Alan Ruskin who is head honcho of international forex strategy at RBS that

‘this is the start of the debasement of the world’s reserve currency’

‘In the grand sweep of history we are witnessing the end of Rome on the Potomac’

Hats off to a great command of words, even Obama would find difficulty in expressing himself in such a short and succinct way!

But for the sake of our futures and those of our children and grand children we fervently hope that Mr Ruskin is wrong.

Despite the fact that so many of our civil liberties have been eroded, led by the US and followed by Britain’s political easy option lapdogs, and quickly encroaching on Europe, the fact remains that our watered down western version of democracy is still a preferable option to any other alternatives.

The Muslim threat is growing, with the Taliban who are unable to treat their own mothers with dignity, is about the worst case scenario, so lets just hope that the good old US can get back on track and preserve, not only our own way of life, but improve and enhance that of the rest of the world.

Of course it is unlikely to happen as intelligence, moral rectitude, dedication to the people, honour etc., etc., is no longer on the ‘must do’ list of priorities of our current world leaders, President Obama has yet to impact one way or the other but the portents are not favourable so far.

What does that leave us with after that rant? Gold!

It’s fast becoming every man for himself so don’t miss the boat, ride the gold bubble! Follow up with silver. Keep an eye on the Gold/ Silver ratio and be prepared to switch between the two for some short-term action but do not go short on either!

Please let us all keep our fingers crossed that the US can ride out this storm and that Obama is not ‘all mouth and no trousers’ and does have the political will and backbone to take the unpopular decisions necessary to keep America in the driving seat.

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