Alex Stanczyk

The End of the Gold Carry Trade

"The whole reason why there is a credit crisis in the first place is because nobody trusts any institution that isn’t owned, backed, or financed by government debt. So where does that leave the investors?"

Great point. In reality any government is truly just a representation of the citizens of that country's wealth and ability to pay taxes. That is, after all, where a governments money comes from.

So really, people are buying US Citizens credibility to pay. Only problem there is US Citizens for the most part are in debt to the hilt, losing their jobs, and some are more concerned about putting the food on the table than buying Christmas gifts.

Gold on the other hand, requires no government to back up its value. It has had value for over 5000 years of human history. Not going to change tomorrow.

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