I have a feeling that there will be another down trend in the equity markets shortly.
you'd think a down trend in equities would drag down commodities to, as it did in the crash of 2008. But, i think that because of the severity of the worldwide debt, and massive liquidity ("stimulus", money printing), many commodities that would have usually tumbled will tend to have minimal downward movement, remain unscathed, or actually make gains. When the markets start a downtrend, investors are leaving equities and looking for a safer investment, typically the US Dollar, but because of its instability I think that investors will search for something else, a physical asset to preserve their wealth.
Monday, November 23, 2009
Tuesday, November 17, 2009
"Damn it feels good....."
About two months ago I had a conversation with my father. We discussed economics, particularly the condition of the US economy and its relation to the global economy. I argued that because of the "recession", most nations are commited to creating serious liquidity to try and jumpstart their local economies. This will lead to serious inflationary issues and likewise the rise in demand for commodity based currency, especially precious metals. The US is no exception. Right now the condition of the US economy is so unstable and so lop-sided that we are commited to either printing money or borrowing it to support our way of life. We import more than we export, we spend more than we make, even the nations that used to lend money to us are thinking twice now.
The US Dollar is the world's reserve currency, which means that it is the largest and most depended on currency the world has to offer; almost. Gold, the mother of precious metals, is the only currency that is more stable and more dependable than the US Dollar. The two currencies are inversely related, meaning that if the value of one diminishes the value of the other increases. That being said, the value of the US Dollar is in the most dire straits it has ever known, which is why I believe that the value of gold will continue to increase greatly.
On those grounds I told my father that I believed that the precious metals were the most secure investments for the coming years. The price of silver tends to rise about twice that of gold, and the price of a silver mining stock tends to rise about twice that of silver itself. So by purchasing stocks in a silver mining company I increase my earnings by nearly 4 times.
It felt good when my parents came clean and admitted that my predictions were right.
The price of gold now sits at $1140.00, more than a 14% increase since our initial discussion.
The US Dollar is the world's reserve currency, which means that it is the largest and most depended on currency the world has to offer; almost. Gold, the mother of precious metals, is the only currency that is more stable and more dependable than the US Dollar. The two currencies are inversely related, meaning that if the value of one diminishes the value of the other increases. That being said, the value of the US Dollar is in the most dire straits it has ever known, which is why I believe that the value of gold will continue to increase greatly.
On those grounds I told my father that I believed that the precious metals were the most secure investments for the coming years. The price of silver tends to rise about twice that of gold, and the price of a silver mining stock tends to rise about twice that of silver itself. So by purchasing stocks in a silver mining company I increase my earnings by nearly 4 times.
It felt good when my parents came clean and admitted that my predictions were right.
The price of gold now sits at $1140.00, more than a 14% increase since our initial discussion.
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