Profit Confidential, the popular stock market e-letter, says that the rise in gold prices over the past decade can be directly related to the deterioration of the U.S. dollar over the same period.
According to Profit Confidential, “…the bull market in gold is also telling us the new reserve currency of the 21st century will not be fiat currency. No, not the Canadian dollar, not the Australian dollar or the Indian rupee (although they will continue to rise in price against the U.S. dollar)—none of these will cut it as a reserve currency. But only old-fashioned gold, the yellow metal that was first accepted in coin format in 600 B.C., a currency that can only be mined with a man’s bare hands, a currency with no debt behind it, can be the real reserve currency of the world.”
Writing in Profit Confidential, Michael Lombardi, MBA, says, “While the Federal Reserve tinkers with the second phase of what it calls ‘quantitative easing’ (basically, an indirect way to increase the supply of money in the system when all else has failed), the ramifications of which we will feel for months or years, other countries are raising interest rates to slow growth and fight inflation. Australia, Canada and India have all increased their interest rates over the past several months.”
“There are several reasons why interest rates have risen in these three countries. Central banks are moving rates higher to get away from ’emergency’ low levels. They want to cool economic growth. They are also concerned about inflation, especially in India where consumer prices are rising at the second fastest rate amongst the G-20 countries.”
The report says, “…for America and Japan, it’s a very different story. They are not enjoying the economic rebound of countries like Australia, Canada and India. At the same time, the U.S. government has not imposed any austerity measures (like France and England did) to reduce government spending. Hence, how can the U.S. dollar not go down in price against other world currencies?”
“You have major developed countries raising interest rates. You have the U.S. in such a fragile state, where higher domestic interest rates are sure to cause the dreaded double-dip…where politicians have yet to announce any major cuts in spending to bring the $1.4-trillion annual deficit under control.”
For the full report, visit http://www.profitconfidential.com
Profit Confidential is Lombardi Publishing Corporation’s free daily investment e-letter. Written by financial gurus with over 100 years of combined investing experience, Profit Confidential analyzes and comments on the actions of the stock market, precious metals, interest rates, real estate, and the economy. Lombardi Publishing Corporation, founded in 1986, now with over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more on Lombardi, and to get the popular Profit Confidential e-letter sent to you daily, visit http://www.profitconfidential.com.
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