the broke broker

Fools Gold

This last month I've been speculating on Gold prices, and have made some very easy profits. Im struggling to find shares at good value, I reckon this is because we are near the end of the recent stockmarket bull, a rally over the course of the last two years that was arteficially stimulated with cheap money. I'm waiting for a big correction and expect the markets to collapse sooner rather than later, what am I, some sort of pessimist?

After the tech bubble burst and 11/9 interests rates dropped and it was easy to get your hands on cash\debt. The world went spending, China used the money to build business, America used the money to buy white goods from China (think Plasma TV's). America hands China $3bn a day, China has more USD than it knows what to do, America has more debt than it knows what to do. Now assuming the US has to pay this debt, what will it do? Work harder? Humm. I think the first thing it will do is devalue it's currency, this will reduce its debt. The snag for the rest of the world (most notably china) is that we have trillions of USD that will be worth less with the fall of the dollar. So anyone and everyone wants to get shut of their dollars - they are swapping them for gold!

I rode the gold bull from 540-600 (USD), I think its time for a correction and suspect it will slump to about 570 from its current level of 600. When it does, jump on for the ride, the only way is up. The best comment I have seen on the web that lucidly explains my thinking was found today, published in the torygraph.

posted by MiniFTSE @ 8:41 PM