Will Gold Hold Above $500?
The very rapid run up of gold price to over $504.75 (December 2nd) during last week gives some cause for concern. It closed the week at $502.90 and only momentarily touched below $500 briefly during one day.
One has to wonder if the $500 price will hold. I am enough of a contrarian to believe that there could be a correction. In fact, a correction could be a needed prelude to further highs in the very near future. This would be another great buying opportunity for us.
It is important to remember that gold has historically been real money. It was so back in biblical times and has been until governments and banks found that paper legal tender would be considered as money by the naive populations. Then they advanced to the fractional banking system which enabled banks to keep only a small percentage of the deposited cash and to create additional currency out of air to lend to the naive.
Through this mechanism, the United States government has accumulated a funded debt of over $8 Trillion and has a total debt approaching some $40 Trillion. These levels of debt have never in the past been seen. Some time, the piper will have to be paid. When is the big question. We are not alone in this madness, as all other nations and central banks have joined in this questionable party.
The masses have yet to recognize what has happened to paper currency and they are still in love with it. Once they do, real money will be the media to which they will turn. However, one must wonder if all the present news on gold will force a correction before it moves on upward. This is a likely event. We will have to wait and see how it plays out in the near term.
The future is completely in the hands of the Sovereign God of all. He determines the future, but we are to use our god-given brains for contingency planning. It is wise to study the political and economic situation into which God has placed us. Then we are to make our plans and commit them to the Lord for the outcome. The results are totally up to Him. Regardless of the results He provides, we are to be thankful and give Him the glory.
Best to each, Doug
One has to wonder if the $500 price will hold. I am enough of a contrarian to believe that there could be a correction. In fact, a correction could be a needed prelude to further highs in the very near future. This would be another great buying opportunity for us.
It is important to remember that gold has historically been real money. It was so back in biblical times and has been until governments and banks found that paper legal tender would be considered as money by the naive populations. Then they advanced to the fractional banking system which enabled banks to keep only a small percentage of the deposited cash and to create additional currency out of air to lend to the naive.
Through this mechanism, the United States government has accumulated a funded debt of over $8 Trillion and has a total debt approaching some $40 Trillion. These levels of debt have never in the past been seen. Some time, the piper will have to be paid. When is the big question. We are not alone in this madness, as all other nations and central banks have joined in this questionable party.
The masses have yet to recognize what has happened to paper currency and they are still in love with it. Once they do, real money will be the media to which they will turn. However, one must wonder if all the present news on gold will force a correction before it moves on upward. This is a likely event. We will have to wait and see how it plays out in the near term.
The future is completely in the hands of the Sovereign God of all. He determines the future, but we are to use our god-given brains for contingency planning. It is wise to study the political and economic situation into which God has placed us. Then we are to make our plans and commit them to the Lord for the outcome. The results are totally up to Him. Regardless of the results He provides, we are to be thankful and give Him the glory.
Best to each, Doug
posted by Doug @ 5:01 PM
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