Hold on tight to your paper greenbacks folks because sooner than you think they will have collector value as “a currency that once was” as the USD continues to collapse. Gold may not make a BIG move for some time as the administration continues to snowball the public about the severity of just how bad off this economy is. The fear is what will your dollars be worth after all this spending? Once the economy starts to recover there is significant risk of high inflation and that is what will drive gold higher. The other short term risk is the lower standing across the world in the USD as we spend ourselves into bankruptcy. Lets see what comes from the G20 meeting and where gold and the USD are after that.
The financial situation in the U.S. is teetering on a very slippery edge with a budget deficit expected to reach a record $1.8 trillion this year. The U.S. dollar has dropped significantly against all currencies. There are “justified and real” concerns…Across the globe, the dollar’s reserve currency status is “increasingly coming into question.” In fact…leaders at the G20 Summit in London next week will be discussing the possibility of a new global reserve currency to replace the dollar.
The dollar’s role as world reserve currency is also being called into question by the United Nations, which will hold panel discussions next week on replacing the dollar with a shared basket of currencies similar to the old Ecu (European currency unit). As central banks and sovereign wealth funds pull out of the dollar and other currencies and into a new global currency, he expects gold will “remain in a bull market for the foreseeable future.” Silver Investing News
