The news of the House passing the Obama $825 Billion Stimulus Package sent the price of gold over $900 an ounce. This seems to be the trend lately…each month a new higher trading range for gold prices.

Government Spending Driving Inflation Fears

In a Bloomberg article market watchers confirm inflation fears,

“Central banks are going to start printing money and it’s not an ideal place for investors to be,” said Joel Crane, a metals strategist at Deutsche Bank AG in New York. “People don’t have faith in currencies at the moment. There is still an underlying faith that gold will go higher.”

I would consider this a reasonable conclusion as our Fed has never been very good at stepping on the gas or the brake in just the amount necessary. Monetary policy is a rather blunt instrument so this is to be expected.

Devaluation of fiat currencies world wide is gaining ground do to all of this spending and printing. Bloomberg again puts it like this,

Gold will rise in the longer term, “based on a growing distrust of all paper currencies,” said Adrian Day, president of Adrian Day Asset Management in Annapolis, Maryland. “People are turning to the one true money, which can’t be created by governments and holds its value.”

I’m with Mr. Day…I don’t trust currencies including the US dollar right now. So convert your willowing US dollars into physical gold and watch it grow.

Happy Investing!

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