Thursday, July 17, 2008

US dollar, Inflation and relevation with gold

From the senario and common knowledge the US Dollar value have been dropping for a few years,and from what was happened in this time the US Dollar don't have sign it will going up again and maybe it will going down far-far away untill the capitalist system will going crushed.The price of oil have been reached highs above 140 US Dollar perbarrel,automatically the price of basic food item like corn,flour,rice,cooking oil was going high.

The case above will make effects to the gold price.

  1. US Dollar going down,the price of gold immediately goes up because gold mostly mined in the contry not using the US Dollar.The exchange rate differrences make gold more expensive in terms of US Dollar.
  2. Gold has been used as a hedge against inflation for thousand of years.It is the best form of money to hold during times of inflation.When people start to buy more gold as hedge,it creates demands which raises the price of gold.Double benefit.
The government of US was pumping in hundreds of billions of dollars into the financial market by simply printing more money.They are devaluing The US Dollar.

This situation make gold greater.Gold always does well during good times and times of trouble.

When the stock market went up for the last year,the gold price went up even more.
When the US Dollar went down above the few years,the gold price went up.
Now when the stock market going down,thw gold price is still going up.

For now who ever have been keep the US Dollar please throw it.Please buy gold!!! The price of gold will going up more and multiplied in the future.The US Dollar currency is just a paper ,no value.


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