From 2003 to April 2009 China quietly increased its gold reserves by 75%. Today China is the 8th largest holder of Gold in the world, holding over 34 million ounces. Hmmm.
The USD has been in decline over 38 years, when Nixon took the dollar off the Gold Standard. Being not so smart, I notice the USD decline even more since 2002. Hmmm again. As the dollar goes down, historically Gold goes up. For example, the USD has declined 35% since 2002; gold has risen 290%.
Right now the U.S. is the largest debtor nation in the world. It's a fact that as a debts and deficits continue to skyrocket, and they will, that downward pressure will continue.
At www.bluechipoptions.com we teach how we invest in Gold and other precious commodities.
The issue with debtor mentality, no matter how it occurs (idiocy like Bush, or "roll the dice on the whole game") like Obama, is that the USD loses value. And this means that we as Americans have to have something that is going up in value. There is always a bubble in some form, even in the worst of times.
Contrarians believe the U.S. Treasury bill is in effect the new greatest bubble we've created, on debt, and over time the populace (Joe the Trader) will begin to understand that a world currency, or that "something is going too right". We're building our next new bubble in U.S. Government bonds.
Remember, stocks do not always outperform bonds.
My point to this is with the vast increase we've seen in the markets recently, we've also seen our credit card companies increasing the cost of borrowing dramatically, and this will longer term cut back the credit card spender. The average American has over $8000 in revolving credit card debt, yet only 56% of Americans even have a credit card. There are many false facts I could find in researching average debt, but it took me to:
1. declining home equity debt availability
2. housing declines, despite all the happy stuff that "it's getting better", continue
3. when Americans want stuff they are going to have to actually pay for it.
