As 2011 winds to a close, the importance of investing in gold has never been more clear and more urgent.
Posted by Adam King on December 28, 2011
Gold Investing in the New Year
December 28, 2011 – As 2011 winds to a close, the importance of investing in gold has never been more clear and more urgent. This year we have seen the continuation of the slow-motion crisis that has literally changed the way we live our lives. From revolutions in Northern Africa to riots in Athens to Occupy Wall Street, 2011 will go down in history as the year of the protester, as Time Magazine so aptly displayed. The primary reason for this mass discontent is economic. In Tunisia, it was a street vendor who began the revolution by lighting himself on fire. In Athens, jobless youth stood against tear gas and riot police. In America, protesters occupied Wall Street first.
While one may agree or disagree with the politics of the protesters, their general qualm with the way things are is pretty pervasive in markets, as well. The fiscal policy that we have been living under is extraordinarily dangerous and investors know it. They continue to make money, so they don’t protest, but they aren’t exactly serene.
Nor should they be considering the many problems confronting the world. Europe is still in the middle of a crisis that threatens to expand the rift between Northern Europe and Southern Europe and could possibly undermine the validity of the Euro. American banks exposed to European sovereign debt are collapsing as their investments flop. American bank depositors are losing their money as banks are legally allowed to gamble with client accounts. Central banks continue coordinated efforts to maintain a precariously balancing system with extremely low interest and nowhere to go should a major concern arise.
This all sounds like doomsday hyperbole, but in fact it is quantifiably true. Greece doesn’t have enough money to cover its debts. Britain has a debt to GDP ratio surpassing 900%. MF Global collapsed on Halloween after a $6.3 billion bet on European sovereign debt that failed. The Commodities Futures Trading Commission issued ruling 1.2.5 that allowed MF Global to use client funds in the losing bet and bank customers are currently “missing” $1.5 billion of the money they deposited in the bank.
All signs say invest in gold. And right now prices are very good for buying. We invest in gold for the present and for the future. The recent price dip in gold has made the current a particularly good time to take advantage and increase your position in precious metals. As we go forward, gold will be more valuable as both an investment and a return to safe haven assets. If, and we can hope, the global situation improves, shortages in precious metals ensure the price of gold will remain competitive. But if any of the concerns facing the world metastasize, you will be very glad that you made the choice of investing in gold when you had the chance.
Stewart Lawson
Senior Staff Writer – Certified Gold Exchange
Categories:
US Gold Market
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