It is getting harder every day to disparage gold investing but the boys on Wall Street keep trying. Posted by James Randolph on July 18, 2011
It’s high time to get serious about buying gold.
July 18, 2011 – It is getting harder every day to disparage gold investing but the boys on Wall Street keep trying. Now that the price has risen straight through the $1,600 “barrier” you can be sure they’ll kick it up a notch.
But that barrier was just a number concocted from complex mathematical analysis of countless variables that have absolutely no relevance to economic conditions today. The gold bears’ arguments are based on premises devoid of validity and credibility.
Gold is simply doing what it always does, its price anchored in reality and driven by fundamentals – the way a market is supposed to work. Gold rises to dominance when man’s contrived stores of wealth begin to unravel and will remain dominant for as long as it takes to for all markets to restore equilibrium. Government attempts to counter market forces only accelerate the decline.
Record high corporate cash holdings are not a sign of a strengthening economy as equity bulls profess. Quite the opposite, they signal a strong lack of faith in the economy, a broad withdrawal from expansion to a defensive position that they hope will see them through a crisis unprecedented in our history. And their profits, which pundits tout as a sure sign of an ongoing bull market, are but a means to that end. Rather than commit profits to growth, companies are hording as much of them as possible.
The end of QE2 was not the precipitating event of total collapse as many predicted, but it has underscored the inability of the stock market to keep moving on its own. More precisely, it has facilitated the market’s response to fundamentals. QE2’s debt buybacks were a daily injection of cash into the market that let equities sail out of the doldrums. Now, with only irregular contributions from QE Lite, the market seems lost.
We have hindered the markets’ quest for equilibrium far too long. There is nothing to be gained from keeping it up. It’s high time to pack up all those charts and graphs, unplug the computers, and throw out all of the obsolete texts. It’s time to step back completely and take our lumps as the markets find their own way back to reality.
It’s also high time to get serious about buying gold to see us through until the dust settles.
Senior Staff Writer – Certified Gold Exchange