Quote:
Originally Posted by
Skol
Her are a couple of paras. from an article on gold in USA Today.
"the fundamentals for a gold rally don't appear to be here. Core inflation, minus food and energy, has had its lowest 12-month rise in 44 years, notes Moody's Investor Service.
The nation's money supply has risen at a modest 1.7%.
The trade weighted value of the dollar has risen 4.6% this year according to the St. Louis Federal Reserve Bank."
and
"Mostly the advocates of hard currencies are either selling gold or they're pushing a political agenda," says Tom Muldowney, managing director of Savant Capital. "They spend time scaring people."
Ain't that the truth.
Here's a cut/paste to get you going Skol, from a journalist who must have been reading JB's posts..;)
Quote:
Minesite Weekly Roundup 14th – 21st June 2010
The shrill squawks of rage from Obama at the oil leak in the Bay of Mexico tell the world that the end of cheap oil in the States is in sight. It may take some time to sink into the American psyche, but the era of cheap oil for which the US has fomented war and aggravation around the world is over. BP and its drilling contractor were working at the edge of human capability about 1 mile below surface and accidents happen. It's a fact of life and even an all-powerful President of the United States can do nothing except squawk and allow Congress to run a kangaroo court.
The question then has to be asked - what does this do for the US dollar on which the prices of all basic commodities are based. Nobody knows the answer. All we have are multitudes of self serving theories from economists. But this is happening at a very strange time as all around the Western world paper currencies are under scrutiny. The euro is under particular scrutiny as it represents the currencies of a widely disparate set of countries ranging from Greece with its notoriously weak economy to the much stronger Germany.
Let's face it, a dollar possesses value only because enough people agree that it does. But if a large body of dollar-holders rebelled against this notion, the dollar's value would decline, if not disappear altogether. Paper currencies are known as 'fiat currencies' after the Latin phrase, 'let it be done'. In other words they are backed solely by Government decree and have no intrinsic value yet they underpin the entire network of global commerce.
When the world's financial system went into freefall in 2008 China was stuffed to the gills with US dollars from its trading surplus. Metals prices as denominated in US dollars fell and China took the opportunity to build stockpiles of metals and minerals at very low prices. The Chinese could see the ultimate value of base metals compared with currencies at a time when Western Governments were printing paper money under the weaselly term 'quantitative easing' to buy their way out of trouble.
The future of currencies is becoming a major worry to vast numbers of people as evidenced by the buying of gold in such quantities that there is not sufficient capacity for bank vaults to hold bullion in cities such as London, New York, Geneva, Singapore and Hong Kong. The scales have fallen from the eyes of investors and Obama would get more respect for facing facts rather than encouraging anti-British rhetoric.
Charles Wyatt