Gold becomes the ultimate impulse buy
Today's Financial News - Posted June 18, 2009
Gold’s importance in the markets is changing. Instead of backing up the world’s currencies, it is now acting as an anti-depressant as those currencies lose their value.
By Andrew Snyder, TodaysFinancialNews.com
Baltimore – (TFN): The gold markets are an astounding study. Prices rise and fall on the market’s interpretation of the latest news and global developments.
Rarely do prices move on economical notions so simple and effective as the rules of supply and demand. Instead, gold bugs take a wider approach to the precious metal.
Lately, the nervousness about global monetary policy and the dollar’s ensuing decline has sent gold prices higher. With just a few strong headlines, gold could once again stretch over the critical $1,000 level.
The action surrounding the dollar and its derivative is creating a perfect opportunity for savvy entrepreneurs to take advantage of the hype.
You cannot turn on your TV set without somebody urging you to pack your grandma’s old necklaces into a postage-paid envelope and transform the heirloom into “something you can use.”
The excitement surrounding the gold market reminds me of a line by Ralph Waldo Emerson: The desire for gold is not for gold. It is for the means of freedom and benefit.
Now that just about anybody has the means to become Joe-the-gold-speculator, the commodity’s price is less a barometer of macroeconomic health, but a gauge of the world’s freedom and yearning for happiness.
Gold should be trading for MUCH more
The lower the expectation that success can be reached through hard work, education and good, old-fashioned determination, the higher gold prices will go.
The larger the government grows, the more regulations it creates and the more wealth it distributes right out of our paycheck, the more we will rely on gold.
One headline today proves my point.
Remember the days of walking out of a corner grocery store and eyeing the gumball machine. It was the ultimate compulsion for a kid that just spent an hour listening to his mom say, “put that back.”
But now it is not our parents oppressing our “freedom and benefits.” It is the seemingly unstoppable growth of a government that would shoot itself if it meant getting re-elected.
That is why when I read about a new type of vending machine specifically designed and fortified for the task of dispensing chunks of gold to wary investors, I knew our world was drastically different than just a year ago.
When gold becomes an impulse item at the checkout line designed to make us feel good and trust in our freedom, we know our society has taken a few wrong turns.
Granted there will always be underlying fundamental reasons for the price of gold to rise. The metal is used in various industries and folks that demand physical delivery will affect supply and demand functions.
But lately gold has been used chiefly as an ant-depressant. Investors pop grams, even ounces, of the shiny metal just to calm their fears and reassure themselves they own something with some sort of value.
As long as the hype and the trend continue, gold prices will rise. The bubble is just getting started.
Next Article: The best way to play a strong U.S. dollar
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