No. 1 Reason for Gold 1: Don’t ignore inflation The debate about inflation or deflation erupted after that. Remember that under an inflation rate of 2.5%, gold has increased 400% in the past decade. Through 2013, and 2014, the Federal Reserve is expected not to raise short-term rates much beyond zero. However, it will leave the door open to incite more inflation.On this page you can view the current gold price per ounce
Quantitative ease (massive printing dollars) was used in order to end the recession. In only four months, October 2008 saw the central bank increase the U.S. money supply by more than twice the normal rate. This was a significant achievement in our nation’s history.
Worldwide, central banks have printed an astonishing $12 trillion of stimulus money. This is Robbing us, the citizens. It has greatly decreased the purchasing power, or the dollar in our paychecks, and bank accounts.
Most economists agree [inflation] is going to win over deflation in the end.
Reason no. 2: The Gold Reason 2: Gold Demand is Exploding. Pension funds and hedge funds are the largest investors in gold. The highly paid investment advisors of these funds must be telling their clients [inside Info] what the rest are not hearing.
This’major trends’ is demonstrated by the success and popularity ETFs (exchange-traded funds) that hold and invest Gold. The SPDR Gold Trust, which contains 1,100 tons gold bullion, is the largest ETF in the world. It was never easier or quicker to own gold than today. (on their laptops, via the Internet)
This is not an American phenomenon. The World Gold Council reported that worldwide gold demand rose 15% from the second quarter 2012 to the third (2012).
China and India = Growing demand!
Asian countries, with a population exceeding 2.5 billion and a deep love for gold, are driving greater global demand. China encourages its citizens in China to buy more gold and silver. It also offers checking accounts that can be linked to gold. China currently has India at the top of the list as the largest global gold consumer. The major driver for the continued rise in gold prices is the growing middle class. The continued ‘population growth’ ensures more gold-buyers
No. 3 Reason for Gold 3: Central Banks Are (New) Net Buyers. India’s recent purchase (200 tons) of gold from the International Monetary Fund, (IMF), was the most likely reason why gold surged above $1,200 in 2012. More important is the dramatic reversal which has seen central banks worldwide become net gold buyers and vice versa. As central banks have been gold sellers since 1988, this will be the first “gold buyer” transformation in 20 years. MORE gold buyers equals MORE demand
No.4: Gold Reason 4: Pending Currency Crisis: Portugal and Spain – The “PIGS” – are in very bad fiscal health. They are not the only ones. Iceland is close to bankruptcy. The United Kingdom and the United States are both in financial trouble. They can barely grow their GDP. In the minds of investors and citizens alike, this grim reality has created a “crisis for non-confidence” in regard to fiat currencies. (*). “Paper-Money” is nothing more than ink and paper, backed only by the faith of the issuer. The currency’s worth drops if investors find that their faith is greatly eroded in the issuer. An additional downgrade of sovereign debt by rating agencies is another potential factor that could cause a currency crisis. In these circumstances, Gold, the ultimate store, could be triggered by further sovereign-debt downgrades from rating agencies. Investors and citizens alike will take steps to preserve their shrinking purchasing power.
No.5: The Gold Reason 5: Don’t wait for the Mania stage: The slowly growing gold bubble will eventually cause gold prices record highs. It will then inflate in three distinct stages. The currency devaluations will drive the growing investment demand. Stage 1: This is where things start. China and India (and their citizens) buying up 100 tonnes a year! Stage Two will see gold prices go through a dramatic ascent, much like the late 1970’s. Stage Three will be the mania stage, where everyone and their grandmothers jump in to buy gold as it goes up with price escalations. As gold prices climb to $5,000-an ounce, it is possible for investors who got in earlier (gold at about $1,000 per ounce), to make fortunes.