Gold Continues To Shine.

July 24, 2011 – – Gold Continues to Shine:  From the low price reached, during the week ending  October 24, 2008; through last Friday (July 22, 2011) Gold has increased in price by +129% (nearest futures contract).  It currently is priced just 40 cents “South” of $1,600 an ounce.  This is the highest Gold prices have been for 30 months.  Persistent Euro Zone debt concerns, a weak dollar, central bank hoarding, the continuing crisis in North Africa and The Middle East, inflation worries in the U.S. and the movement toward monetization (backing currencies with some degree of gold to stabilize the exchanges) all contributed to very high gold prices. Additionally, gold supply is expected to increase by a subdued 3.6% over the next five years. Supply will only increase if the price of gold exceeds $2,000 an ounce, so that new mines will come online.  Expect gold prices to continue to soar on these very bullish supply and demand fundamentals.  Further, we are approaching the economic “abyss” of August 2nd; with no firm plans to increase the U.S. debt limit.  This could be extremely problematic for global economic stability. I fully expect gold to be over $2,000/oz. by December, 31, 2011; if not sooner.

How does the current gold price rise compare to other commodities, over the 28 months from October 2008 to July 2011?  The listing, below, tells the tale:

  • Category          Commodity   % + (-)     High Mo.     Low Mo.
  • ———————————————————————————————
  • Stocks:              DOW Jones   + 66%      May ’11         Mar. ’09
  •                               NASDAQ        +113%      Jul. ’11          Nov. ’08
  •                              S&P 500         + 69%      May ’11         Mar. ’09
  •                              Russell 2K     +105%     May ’11         Mar. ’09
  • Currencies:     U.S $ Indx      –      9%    Mar. ’09       Apr. ’11
  •                              Austral. $      +110%      May ’11         Oct. ’08
  •                              Brit. Pound   +   3%      Aug. ’09       Jan. ’09
  •                              Canada $        + 36%     May ’11         Mar. ’09
  •                              Euro                + 16%      Nov. ’09       Jun. ’10
  •                              Yen                   + 28%     Mar. ’11        Oct. ’08
  •                              Swiss Franc   + 38%    Jul. ’11          Nov. ’08
  • Metals:              Gold                 +129%    Jul. ’11          Oct. ’08
  •                              Silver               +330%   Apr. ’11         Oct. ’08
  • Grains:              Corn                 + 88%    Jun. ’11         Jul. ’10
  •                              Soybeans        + 93%     Feb. ’11         Dec. ’08
  •                              Wheat              –  17%      Aug. ’10        Jul. ’11
  • Energy:             Crude Oil        –   6%      Oct. ’08        Feb. ’09

So, what does all this mean?  The Japanese Yen peaked in March, 2011 (the earthquake month) as Japan faces enormous rebuilding costs. The high month for the Dollar Index was the low month for most Stock Indices. The Canadian Dollar hit a low, at the same time as U.S. Stocks. Only 3 of the 17 commodities saw percentage decreases (the Dollar, Wheat & Crude Oil).  Expect this trend, toward higher commodity prices, to continue as long as the dollar continues to weaken.  If you’re holding dollars, your holding a declining asset.  If you had an investment denominated in most foreign currencies, you saw a huge increase, regardless of what your investment did.  For example, if you bought into an Australian denominated investment and it just broke even, you still made an incredible +129% on your money, when you converted that investment back into dollars.

As we approach the economic “Abyss” of August 2nd, expect Gold (and other hedges against a global financial catastrophe) to continue to rise strongly. However, the event that will drop all these commodity prices; will be the coming inflationary Great Depression II, in the next 2 to 3 years; as demand will “fall of a cliff.”  A financial system built on debt, can NOT be saved by more debt!

The Master of Disaster

About wfoster2011

Disaster researcher and current financial and economic news and events: Accidents, economics, financial, news, nature, volcanoes, floods, earthquakes, fires; airplane, ship & train wrecks; tornadoes, mine cave-ins, hurricanes, pestilence, blizzards, storms, tzuami's, explosions, pollution, famine; heat & cold waves; nuclear accidents, drought, stampedes and general. Futures trader using high volume and open interest futures markets. Also, a financial, weather and mundane astrologer with over 30 years of experience. Three University degrees from California State University Northridge: BS - Accounting MS - Busines Administration BA - Psychology Served in the U. S. Army as an Armored Platoon Leader in the 5th Battalion, 68th Armored Regiment, 8th Infantry Division (Retired). Have published three books and 36 articles available for sale through my blog: Commodology - Secret of Soyobeans (Financial Astrology) Timing is the Key (Financial Astrology) Scum City, a fiction novel (no longer available, under contract to major publisher) Currently resident of Las Vegas, NV, USA
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1 Response to Gold Continues To Shine.

  1. Wow! Fantastic Post, great work I am so impressed you have good post all the time. However, this post caught my eye, and it spoke for itself. Look forward to your next post; I know it will be great, thank you Master of Disaster.

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