Gold hit's $1,000 this morning.
I have to admit, I never thought it would happen.
Gold hit's $1,000 this morning.
I have to admit, I never thought it would happen.





^^^ well the new component in the 'mix' is the Chinese gov't. They are now more or less on record confirming that they will sell US dollars / US treasury bonds and buy physical gold every time the spot market price of gold dips a bit. This new component is really sapping the 'strength' of the 'paper gold' speculators, because every time they short sell lately, instead of forcing small time investors into stop loss forced sales and driving the gold price even lower, the Chinese now 'call their bluff'. This is doubly damaging if the speculative short sale was 'naked' ( which is arguably the case for a number of the large US financial institutions ).
As to congratulations, this really isn't something to be 'happy' about. Granted that I am not above 'capitalizing' on the obvious, which is why I own some physical gold as well as some gold miner stock shares. But the reason that gold now appears to be establishing a firm uptrend is that the world is rapidly losing confidence in the US dollar / US treasury bonds due to record setting levels of new borrowing ( i.e. new US treasury bond issues ) and record setting levels of US dollar printing in an environment of subzero private sector economic growth. In other words, unlike the majority of Americans, the Chinese / Japanese / Europeans still worry about such things as economic fundamentals, and are clearly able to read Obama's handwriting on the wall that as creditors the only way that they are going to be paid back is with massively devalued future US dollars.
This is forcing a situation upon every non-US dollar based foreign investor where the currency exchange rate losses are likely to wipe out any potential gains in US paper asset value - as was the case today S&P up ~1% but US dollar down ~3% equals a net 2% loss. The 'sad' situation, though, is that the majority of Americans actually think that their paper assets 'gained value' today. In point of fact they took the same 2% loss, but just don't realize it yet. I wonder if they will realize what's happening next week / next month when gasoline / food / other US dollar denominated prices go up in response to the US dollar going down ! Naaahhhh ... they'll just blame the rising prices on the 'greedy' oil companies and WalMart !
~
Last edited by Melonie; 09-08-2009 at 02:06 PM.
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