For many years now I've been saying that Gold is a Crisis Hedge rather than an inflation hedge. But it is also a commodity and a monetary instrument. Thus there are a variety of factors affecting its price at any given time. Currently as the world economy continues rolling on people are less worried about catastrophe around the corner and they are beginning to believe that the FED is all powerful and can paper over any and all monetary problems with the stroke of a pen. So why worry? This has taken some of the edge off the urgency to buy gold. Plus as the stock market reaches new highs the "opportunity cost" of holding gold increases. So does this mean that gold is headed for the dustbin and … [Read more...]
What are “Foreign Exchange Reserves”?
Will the U.S. Dollar Be Replaced as the World's Reserve Currency? Foreign Exchange Reserves are foreign money held by International banks for use in international trade and in an effort to diversify their holdings and hedge against the inflation of their own currency. The most common items bought and sold with their foreign exchange reserves are oil and gold. Up until 1944 the asset of choice was gold and it was used as the medium of exchange between countries to settle their debts. But in July 1944, delegates from the 44 Allied nations gathered in Bretton Woods, New Hampshire., and made the U.S. dollar the reserve currency of the world. At that time, the dollar was pegged at $35 per ounce … [Read more...]
Selling Your Scrap Gold During The Economic Downturn
Selling Your Scrap Gold Economic downturns are a fact of life and you never know when you might be caught up in events outside your control. That is why you always have to be prepared for the circumstances life might throw at you. If during good times you have accumulated some gold either as jewelry or coins, then selling your scrap gold is one such step that you can take when times are rough. There are many advantages of having some gold as an insurance policy against tough times. What is "Scrap Gold"? In its simplest terms, scrap gold is any gold that is sent back to the refiner for recycling. Mostly it is broken jewelry that is no longer needed. Gold coins are rarely melted down … [Read more...]
Why Gold is a Good Investment for Inflationary Times
The Impact of Inflation on Savings If you keep your money in the bank or in money market funds, inflation can eat away at their value. Inflation can be deceiving because your account balances won’t go down. However, when you take your money out to buy something, you might notice that you won’t be able to buy as much as you used to. Therefore, if you don’t put your money into something that keeps up with inflation, you’ll soon find your savings won't buy as much. As an investor, you need to be prepared for the risk of inflation. It happens when there is too much money chasing too few goods, so prices have to go up (because of an increase in the money supply). When the economy is facing … [Read more...]
Gold and the Federal Reserve
Gold-US Dollar Link by Chris Vermeulen The $1800 per ounce level continues to be a major technical resistance area for gold. After hovering near $1800 recently, gold moved sharply away from that level last week to close at $1735 an ounce. Despite that, more fund managers and analysts continue to point to a bright long-term future for gold prices. John Hathaway of the Tocqueville Gold Fund says gold will reach new highs within a year. He based his forecast, like many others, on the fact that negative real interest rates look likely to persist as Ben Bernanke and the Federal Reserve continue to print money. Believe it or not, some mainstream analysts are also touting gold’s … [Read more...]
Civil Liberties Rest Upon Sound Money
Sound Money = Freedom Over the years I have written many times about the necessity of sound money to base our economy on and the results of wanton reckless money creation that will alway result in inflation and a worthless currency either sooner or later. I've told you about how inflation affects you, and how the Money Supply affects Inflation and Who Inflation Hurts the Most. I also spoken at length about the value of gold as the Timeless Inflation Hedge and how Gold is Still Money. Today, Wendy McElroy, author of The Art of Being Free shares a deep and fascinating research on all the main issues we face: the loss of security in the name of security, the state's role in strangling … [Read more...]
Beginners Guide to Gold Investing
Gold Investing 101- Precious metals, particularly gold, are a very common investment opportunity in our modern world. Gold has become extremely popular both as a hedge against inflation and currency devaluation and as a primary investment with historically solid returns over time. Many small-time or new investors are eager to invest in gold; however, the high prices and multitude of investment options can be overwhelming. Buying gold physically in the form of bullion or coins, trading for gold in the foreign exchange markets, or trading a variety of gold related stocks or mutual funds are all viable methods to invest in gold. Some of these methods can seem downright frightening for the new … [Read more...]
How the Dollar Affects Gold Prices
Interview with Jim Puplava, by Jeff Clark, Casey Research Jim Puplava has robust convictions….The CEO of Financial Sense News Hour, Jim is a man you should listen to carefully if gold factors in your portfolio or if you are thinking about adding gold anytime soon. In this interview, Jim talks about how the dollar affects gold prices. He discusses whether we are moving into a phase of deflation or inflation and gives his views on what exactly that will mean to gold investors. He discusses the likely impact of inflationary or deflationary forces, which one he believes will win out, and the effect it will have on our economy. Finally, he makes a very interesting prediction. Of course, … [Read more...]
How Does Gold Fare During Hyperinflation?
By Jeff Clark, Casey Research Inflation is a natural consequence of loose government monetary policy. If those policies get too loose, hyperinflation can occur. As gold investors, we'd like to know if the precious metals would keep pace in this extreme scenario. Hyperinflation is an extremely rapid period of inflation, but when does inflation (which can be manageable) cross the line and become out-of-control hyperinflation? Philip Cagan, one of the very first researchers of this phenomenon, defines hyperinflation as "an inflation rate of 50% or more in a single month," something largely inconceivable to the average investor. Hyperinflation has One Root Cause While there can be … [Read more...]
Why Buy Gold?
Gold has been one of the best investments over the last decade going from a low of $252 to a high of $1889. If you're looking for a way to protect against the effects of inflation, currency collapse or economic instability, here are a few things to consider about why gold should be in your portfolio. Return to the Gold Standard If you've been paying attention to what is going on in the world these days, you know that the financial markets have been in turmoil. Much of this relates to the basic underpinnings of the economic system. In the United States, the Federal Reserve is in charge of the money supply and interest rates. Nothing is backing the paper money that is printed, other than the … [Read more...]
