An Evaluation Of Gold News
The world economy is still in recession and all gold news must start with reiterating that. This negative phenomenon showed its signs in 2007, manifested through 2008 and much of 2009, and is ready to fully erupt again. The fake signs of recovery that showed in 2009 were due to massive interventions but, by now, the major economic dysfunctions look like they are ready to strike again.
The world is dealing with unprecedented problems related to sovereign debts. Many of them originated within the Eurozone, due to the difference between the stronger and the weaker economies here. Some of the countries included here by their politicians did not have economies capable to withstand the change and adapt to the artificially constructed common currency. As a result, the stronger economies were forced to take over the protection of the weaker ones against default.
In an attempt to apply the Keynesian formula to avoid crisis the Central European bank issued out important quantities of extra money to buy up government bonds, but the maneuver brought quite opposite results. Moreover, the Federal Reserve also used the same formula, to attempt at covering for some of the country's debts. So, extra dollars were also issued out, with the same effect of government bonds prices going up. Hyperinflation ceased to be a possible scenario only for the worried.
Such circumstances lead to a dwindling trust in paper money behalf of the investors. Gold has a special situation among commodities which makes it a sensitive mirror of this situation. Until 2008, gold increased in price starting with 2001. The 2008 sharp drop of 30% was significantly milder than that of other commodity prices. Until September this year, gold resumed its bull phase, which translated in a surprising increase of 170% in less than three years.
In September gold price fell 16%, raising concerns that a bubble was coming, and that the bull phase for gold was over. But analysts wrote off such doubts. They have compared this mild fall to the 50% decrease of gold price in 1974, before a renewed appreciation phase that took gold to record prices. The seventies are the decade when the last known bull phase for gold had occurred. Gold seems to closely follow the predictions of analysts. Variations are mild and the increase is constant.
The evolution of gold price is now followed by investors ranging from professionals to common people, due to this ongoing world crisis. The crisis has forced virtually everyone to look for alternative financial insurance, which is not directly related to paper money. These are the perfect circumstances for physically allocated money. Being the only truly risk free form of gold possession, gold bullion that is easy to store, easy to carry and easy to trade, sells well. Specialist traders sell gold bullion that is certified by the London Bullion Market Association (LBMA) and additionally offer free storage in their secure vaults.
The world is dealing with unprecedented problems related to sovereign debts. Many of them originated within the Eurozone, due to the difference between the stronger and the weaker economies here. Some of the countries included here by their politicians did not have economies capable to withstand the change and adapt to the artificially constructed common currency. As a result, the stronger economies were forced to take over the protection of the weaker ones against default.
In an attempt to apply the Keynesian formula to avoid crisis the Central European bank issued out important quantities of extra money to buy up government bonds, but the maneuver brought quite opposite results. Moreover, the Federal Reserve also used the same formula, to attempt at covering for some of the country's debts. So, extra dollars were also issued out, with the same effect of government bonds prices going up. Hyperinflation ceased to be a possible scenario only for the worried.
Such circumstances lead to a dwindling trust in paper money behalf of the investors. Gold has a special situation among commodities which makes it a sensitive mirror of this situation. Until 2008, gold increased in price starting with 2001. The 2008 sharp drop of 30% was significantly milder than that of other commodity prices. Until September this year, gold resumed its bull phase, which translated in a surprising increase of 170% in less than three years.
In September gold price fell 16%, raising concerns that a bubble was coming, and that the bull phase for gold was over. But analysts wrote off such doubts. They have compared this mild fall to the 50% decrease of gold price in 1974, before a renewed appreciation phase that took gold to record prices. The seventies are the decade when the last known bull phase for gold had occurred. Gold seems to closely follow the predictions of analysts. Variations are mild and the increase is constant.
The evolution of gold price is now followed by investors ranging from professionals to common people, due to this ongoing world crisis. The crisis has forced virtually everyone to look for alternative financial insurance, which is not directly related to paper money. These are the perfect circumstances for physically allocated money. Being the only truly risk free form of gold possession, gold bullion that is easy to store, easy to carry and easy to trade, sells well. Specialist traders sell gold bullion that is certified by the London Bullion Market Association (LBMA) and additionally offer free storage in their secure vaults.
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