gabe borenstein

Gold and Oil: A Long Term Play on the Economy

Inflation was not an issue for quite some time.The phenomenal price spike in commodities ,including gold and the crude was the result of the massive leveraged speculation by the hedge funds not the function of the excessive demand(demand pull inflation).In fact as the demand for the crude and the other commodities imploded ,deflation and a massive contraction are dominating the current cycle with the vegeance .
The recent hike in the energy sector is driven by the events in the Middle East and Russian emargo on the gas exportd to the Ukraine.In the period ahead these prices should once again resume the downward trend.
The programs in place and the new aid package discussed by the President elect should "ignite" the non-inflationary economic recovery and the stock market rally(U.S).
One financial sectors of the market continues to be vulnearable to a major setback.
Gold ?it is a shiny piece of metal that was utilized as the means of the "standard ". exchange since some primitive societies became aware of the gold. Now ? who cares .Are you going to purchase a house ? a car ?with the kilobars.
When the inflation becomes a threat -not in the period ahead-the sophisticated investors will committ to inflation indexed bonds