Bad For The U.S. Dollar – Highly Bullish For GOLD

2008 October 20
by gold nugget prospector

gold nuggetsAnalysts say the $700 billion U.S. bailout—plus the billions of dollars in capital infusions that have been put in place by governments and central banks all over the world—will be highly inflationary.  Historically, this type of move has been very bad for the U.S. dollar and highly bullish for gold & oil prices.

Recently, some hedge funds were forced to liquidate their positions to cover losses in stocks and other markets, economists at research firm Action Economics told MarketWatch. "For the moment, the weight of the deep funk felt in the global markets is keeping gold on the defensive, while would-be buyers…find more comfort sitting on the piles of cash," Jon Nadler, a senior analyst at Kitco Bullion Dealers, told the financial news service.                                                        gold metal detector

 

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7 Responses leave one →
  1. October 20, 2008

    A spike in gold is coming very soon!

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  2. October 20, 2008

    The question is, how much of gold is a hedge against inflation, and how much of gold is just another commodity, subject to the same fate as all other commodities over the last few months? What is the percentage, and how do we calculate it? I’m sick of hearing about how the price of paper money is manipulated.

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  3. October 20, 2008

    I know that gold is selling off because hedge funds and others are clearing out their positions to lock in profits and offset losses. And I know that many think cash is king right now, and that means selling gold. But I do NOT know how to calculate how high gold will go if say for example the price of corn drops 50%.

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  4. October 20, 2008

    I think gold is going up and I’m looking for a good, hard, downturn to go double dog long. I think oil might lead the way. This imposter of a bail out plan is going to be dis-robed by good old oil and gold.

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  5. October 20, 2008

    There is no shortage of physical metal in the wholesale markets (ie 400oz gold bars and 1000oz silver bars), it is the conversion of that metal into retail coins and bars that is causing a shortage of retail product, pushing up their prices. In other words it is a production capacity shortage.

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  6. October 20, 2008

    When the world is collapsing around you, people tend to run where they can. Gold has had some value for thousands of years, Fiat or paper money has been around for hundreds. But it has only been in the last 50 that all paper currencies are no longer tied to either gold or silver.

    Neither of them can be created willnilly as is the Case of the Dollar currently. When the chickens come home to roost, they will find a burning hen house. The world is awash in dollars, more so every day. All it will take is a few small emerging market nations to sell their dollar reserves to bolster the purchasing power of their own currencies ie. prevent inflation.

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  7. October 20, 2008

    I am not an economist or anything even remotely related to such professionals. However, one thing which I cannot understand is why would the commodity prices (including Gold) will fall in the long run when every country has decided to print more currency and flood the banks with more currency. At some stage this currecncy will be in the hands of people who will use it to pay higher prices for the same goods we buy now, inflation will have to be high and under those conditions, all commodities will have to be high as well. Can someone explain why there can be deflation and falling commodities when trillions of dollars (and euros and pounds) will flood the system with paper money.

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