Gold this morning is plunging by the most since December 2008. For those seeking the reason for the sell off, it once again appears that the market is about 24 hours late in processing news that has been out for over a day.
One of the main catalysts for today's gold price is the realization that the Shanghai Gold Exchange hiked gold margins by 26%. Of course that this happened not one but two days ago (as we reported) is irrelevant. There are other factors to be sure: on Tuesday holdings of the SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, fell by nearly 25 tonnes, their biggest one-day outflow since Jan. 25.
Furthermore, there is another rumor that hedge funds that have been crushed by the market volatility over the past month are shoring cash ahead of Jackson Hole by selling their winners. Either way, at last check gold was down to $1770. This is the price it was on August 16: about a week ago. As for where gold will go next: we suggest investors consider what the options for the world central banking cartel are, and how many of them do not include diluting paper. We are eager to hear the alternatives.
Do they not get that governments at every level are broke?
Do they not get with real unemployment at 20-25% and climbing federal tax receipts will continue to go down? Do they not get that present tax policy, which excludes millions from paying fed income tax, further aggravates the situation.
Do they not get there are not enough rich people to tax to make up the difference?
I did the same thing. I talked to the broker who handles the investments for my retirement right after Obama got elected and told him to take 1/3 of my portfolio and put it into gold, and he, and my boss tried for a few Months to dissuade me from being so gullible as to think that things could get worse than they are.
Well needless to say, two years later with gold prices being $1000.00 higher and they think I got the gift. Or at least they think I'm a genius.
Hell, my boss invested into gold, and pulled it out at $1400.00. At least he is not nearly the nattering nay bob of negativity as he was. The guy handling our investments has talked most of his clients to invest in gold also.
I am currently keeping an eye on some mining stocks that I am just waiting for the right time to invest in. The one I am considering is
Stillwater Mining.
Well, Obama will be sent packing, and we will get a conservative in the office who will push the right buttons as Reagan did. The Supreme Court will declare obamacare unconstitutional, and businesses will begin re-investing.
Eventually things will get moving in a positive direction. However, even if it takes awhile for the US economy to start rolling, other parts of the world will begin improving. Especially China and India who's economies are doing fair.
Now we know that the experts are predicting that in the next 20 to 30 years, China and India will need to build about 20 more cities the size of New York just to handle their population growth. So they will continue to suck up all the resources they can. Just thinking of the copper alone that will be needed is mind boggling. When you consider the minerals needed for the expansion all over the world, looking for a good diverse mining company to invest in makes sense.
That being said, gold will be gold for a long time to come. I do think the bubble will eventually burst, but we could very well see it top $300 to $5000 before it does. Even then it may drop after the bubble bursts, but it will never come back down to what it was. The good old days of America being the bull that droves the world has ended, and so we need to consider what will be left when the dust settles, and so after the gold bubble bursts and falls, I will then re-invest and hold for the long term.
Sorry for the the novel, but I got on a roll.
Your post was fine. I’ve been working at building sound bite skills, but there are still times when writing in paragraphs is necessary.
Your mining comment makes good sense and I know about Stillwater. Even in a down turn there is still raw ore demand as there is always some manufacturing and building.
I think I’ll talk to my broker about it. We just sold some Merck stock and bought platinum. Maybe we’ll do mining next time we have an opportunity.