Gaucho

What Is Going On With Gold?

I think that the author has too much faith in the American system of finance. This meltdown has been predicted for at least 10 years. It is happening now and will continue to unfold over the next couple of years.

The government has take and or supplied banks with 8.5 trillion in 2008 alone. The banks are failing and will continue to fail this year at an accelerated rate. Huge stimulus packages will need to be implemented and frequently.

The government is supposed to finance about 40% of its existing debt and about 2 trillion of new debt next year. Who is going to pay for these bonds at 3% interest rates. We were consuming 2/3 of the worlds savings in 2006 and now we are asking for more than twice as much at the same time importing fewer goods. There will be less imported dollars to buy these bonds with. The foreign countries will need to print more money just to buy these bonds and incur inflation in their own countries.

Finally, the US not the only player in the game. There are many others now, although not as large, that are significant in size. There are other gold and silver exchanges now and the US government will have a hard time controlling them. Inflation in other countries will cause their population to reach for gold as a safe haven for wealth. Besides when the true extent of the corruption of the US stock markets becomes known the US will no longer be viewed as a safe haven for investments. We may, in the future no longer, be the only large center for world finance.