Mercy! Mercy! That Dang Nabed PERCY!

Gold, the "New" World Currency

Gold, the “New” World Currency.

Today the Stock Market made a recovery of sorts. Stocks recovered a small measure of what they had lost in the past weeks. No doubt most of the recovery was the purchase of shares in companies that were undervalued. That is their cash reserves and earnings showed they were worth more than their shares were selling for. Many of these companies produce goods and services necessary to support a decent and in some cases, minimum essential lifestyle.

The government continues to spend more than it takes in and fears changing its fiscal policies will sour constituents and prevent reelection. There is however another reason why the markets fail to grow and unemployment continues as a problem. This is because a primary source of Government revenue is printing more currency than the country is worth which devalues everything. We understand how inflation devalues CDs but take that understanding and apply it to all things finiancial. The Stock market must periodically “adjust” to compensate for the steam rising off the printing presses.

The downgrading of a Government’s credit rating by the S&P reflects directly on fiscal policies that are being abused across a wide spectrum of overspending initiatives. What is beginning to emerge is that the US Dollar is no longer the premier world currency. Fortunately for us, the other world currencies are not much better off and in many cases worse, because governments worldwide have been spending to shore up bankrupt socialist economic policies that funnel vast sums into entitlement programs. The addiction to these programs is acute and efforts to get the monkey under control will lead to ever greater social unrest. The latest example took place in this country with the passage of the recent US Healthcare Bill. This all but insures the United States will not be able to survive the downward spiral of spending vs. revenues.

Slowly the investors of the world are awakening to the currency manipulations that are going on. There is a “new” world currency that is beginning to arise and that is GOLD. There are many who say the current surge in gold prices is a bubble that will collapse once the world markets settle down a bit. What we are seeing is not a bubble but a strong and enduring change. Gold cannot be conjured out of thin air like currency or manufactured with a high volume printing press. Gold is not a fad but a form of currency that has been around a long time and is returning to the forefront as a medium of exchange that has believability. It has become a benchmark against which currencies are currently being measured.

People with a savings account can use GOLD as a measure of the real inflation that is taking place. If two years ago gold was selling for a thousand dollars an ounce and today it is going for eighteen hundred, what does that tell you about an inflated dollar? Duh! Even an old codger like me can see that the current administration is ripping off the nest egg of senior citizens and gold prices are a good measure of the scope.