If the economy is doing so well now, or we’ve turned the corner, or whatever happy talk the pontificating fools financial experts at CNBC, etc. are saying to describe our current state of economic affairs, then why is the price of gold nearly $1,100 an ounce? You would think people would be pulling their money out of this traditional hedge and rushing back into the stock market if everything the financial optimists at Wall Street are touting as signs that we’re back on track was really true. Then again, maybe they don’t know their head from their buttocks, which all things considered wouldn’t be a great surprise now would it.
In this case, “turn the corner” means not going downhill anymore. Production has increased because business couldn’t shrink inventories anymore. But, that just means that underutilized people who still have jobs will be just a little more utilized. Until those people become seriously overutilized, there will be no pressure to hire anyone new.
So instead of being 3000 ft under and sinking fast, we are now 2999 ft under and just rose a foot.
Another analogy. If your kid has been bringing home test papers graded 30 and suddenly brings home a test paper graded 67, you might say the kid had turned a corner. It doesn’t mean that the kid won’t still flunk.
from all the idiots who listen to Glenn Beck.
Seriously, don’t take any investment advice from me, I don’t have a clue.
l suppose it depends on where you are on the economic food chain, eh.
if you’re in a mcjob, or labor, [from your 1st bloomberg link]…
…you’re certainly not feeling it. there’s a reason congress is extending unemployment benefits, ya know.
and like TARheelDem opines:
it just might turn out that he cheated.
A friend of mine (who is an economist and financial professional) believes gold will go up to at least $3000/oz. He’s so sure that he’s leveraging upon leverage to buy gold and gold-mining stocks.
His reasoning is that Obama has overseen/caused the printing of too much money and we will soon see a glut of US dollars which no one will want to own.
I should point out that he’s also a proselytizing hard-core Rand-ian Objectivist who believes Bush’s only mistakes were concocting an excuse he didn’t need for attacking Iraq and not simply bombing the hell out of the citizens of Afghanistan as a purely punitive response for allowing their government to facilitate Al Qaeda.
Gold and Equities prices in dollars are moving up together now because the dollar is devalued due to low interest rates at the Fed and non-stop borrowing.
The nightmare of the dollar going even further into an abyss isn’t as likely a problem as the opposite: when the Fed tightens policy and this bubble of cheap money pursuing risk that it wouldn’t have otherwise pops, those assets will be sold at firesale, almost all at once: deflation of almost all asset classes will result.
The commenter whose freind is fucking up and buying all the gold may well be just fine, but cash as a hedge against deflation would be my advice. Perhaps there will be gold at $3000 first, but that would indicate a volatility in markets over a brief term that, well, I’d be in a bunker for.