Gold is now comfortably at above $1,400 an ounce and rising. It has risen over 28% in 2010 and over 170% in the last five years. The other precious metals – silver, platinum, palladium – have done even better.
The official word is that there is nothing to worry about. The world economies are slowly working their way out the Great Recession. Interest rates are low. More fiat money is being printed daily to make it easier to borrow. With all the pent up demand and new cleantech legislation just kicking in, the job situation is bound to get better in the coming year. Inflation - excluding education, healthcare, food, fuel, and utilities – is low. At the same time the biggest buyer of US Treasuries is now our own Fed using freshly printed bills to quantitatively ease the economy. We are assured that none of this is monetizing (sounds better than ‘inflating out of’) our debt. Things are looking up.
Meanwhile, over to the side, right there behind the curtain, central banks the world over are quietly laying in stores of bullion, as are corporations and private investors. And who knows what it all means that also quietly, ever so quietly, people who don’t need to but can, are beginning to borrow as if they didn’t have to pay it back. No one wants to spook the sheeple for then there will be hell to pay. Shhh!
From the 29dec2010 WSJ – U.S. investment bank Goldman Sachs Group Inc. says it expects gold prices to climb to $1,690 an ounce, and potentially even higher, over the next 12 months as a new round of quantitative easing keeps real interest rates low and drives excess capital flows from countries with trade surpluses—which have traditionally parked their money in U.S. government bonds—into other investable assets, such as gold. "We believe that the crisis of confidence in the financial markets is just getting started," says Peter Grosskopf, chief executive of asset-management firm Sprott Inc., which holds $6.5 billion of assets, including physical gold bullion. "Deficits will widen and we will continue to invest more in the precious-metals sector."