Thanks for the article Bob!!
It seems that many goldbugs seem to dismiss the current action in the dollar. The US economy is a large portion of the global economy, so when we slow, the rest of the world slows as well and capital flight takes place from the peripheral currencies to the dollar. Personally, I would like the USD to settle into a trading range between here (115) and 100. I don't know if I would like to see a new high, as that would increase recessionary trends worldwide, but it appears it may happen until Japan and Europe can spur their domestic economies.
Now when we see economic progress reassert itself overseas, independent of reliance on US export market, then we may see the dollar decline as better investment opportunities present themselves there. And then gold may rally against the dollar.
But I still believe there will be better investment returns available in emerging markets when such a time presents itself.
My only caveat is major economic upheaval, conflict, trade war, oil embargo, or anything that suggests a breakdown in legally binding system of financial obligations amongst counter-parties, will send investors flocking to gold.
That all an economy and financial system is... a bunch of legally binding financial contracts that people and businesses expect others to honor.
Thanks again, Bob!!
Regards,
Ron |
