And the budget deficit in the US is declining, and the hawks on the Fed are making rumblings of slowly ending QE, and the stock market is going ballistic. There’s a LOT of reasons why the “last refuge” investment of precious metals are trading like crap relative to dollar based assets.\
...................
Here’s a few more. The budget deficit is not just declining—its almost going to be cut in half in 2013—to 640 billion. That’s mostly the result of economic growth. If growth keeps up—the deficit will be gone in two years or so.
US economic growth is largely underpinned by the second thing that pushing the dollar up: OIL. The USA is delivering oil supply shocks to the world. We are inverting the events of 1973. Two things happened that year. The opening of the Watergate hearings that investigated Nixons efforts to influence the 1972 election. Also in 1973, came the first oil embargo—which jacked up the price of oil by reducing the supply. Now remember what happened in the next six years—that is between 1973-1979— to the price of GOLD.
What’s happening this year is the inverse of that. This time the dems/obama are on the hot seat for election irregularities. Oil supplies by the US are increasing every year. The US is slated to be oil INDEPENDENT in 4-5 years. This is just enormous. It means among many other things that the US government receipts are going to be so great that government deficits will shrink to relative nothing.
As well, the US dollar has had 75-150 trillion dollars worth of oil reserves added to back the dollar.\
Oil independent countries generally don’t have weak currencies.
What do you think this will do to the price of oil over the next 6 years? (read it this way. Any old gold bug over 60 years old who knows his history — is going to bail out of gold. Period.)
Last point. This one is speculative. There is a growing sense that Obamacare doesn’t have a future. imho the Supreme Court will knock down obamacare later in the year.
With Obamacare out of the way US growth rates imho will tack on another 1.5% annually. This will significantly slash the federal budget deficits—which will help collapse federal borrowing.
Heh. I just turned 60, so I guess I'm too young to "bail". Look. The budget is not being cut perceptibly and growth will continue to be a mirage of increased government spending which isn't economic growth at all.
I agree that the oil and gas industries are a welcome bright spot in the economy, but I don't expect widespread benefits from them as long as the investment climate is so horrible -- due to Obama's regulations, health care, and constant threats of tax hikes.
I appreciate your insight. I think the value of gold right now is not so much a hedge against inflation but against fascism. Of course food, water and personal energy independence are even more valuable investments in that case, but physical gold will always be a useful means of value exchange given its price for size.
Your probably correct about deficits and the effect of Oil independence.
I hope your correct about Obamacare, but I seriously doubt it. The Supremes have been bought off long ago.
I have no idea where you're getting those numbers, but you are extremely naive to believe them. Spending isn't being cut [spending growth reduced imperceptibly] and the only growth in the economy is the spending created by the new dollars Bernanke is printing.
New oil supplies are welcome, but to think they alone can save us is wrong. We're sinking like a stone, dude. Not too sure why you're so enamored of current economic policy, either.