Two years without a budget, and still haven’t a clue as to what is really going on beneath the surface of America’s troubled economy. Despite valiant efforts, confidence in the country has plummeted.
When governments intervene in a marketplace, believing that monetary policy is the best method of ensuring economic growth and stability using fiat currency, the result is an economic nosedive. New worries continue about economic weakness in heavyweight markets eroding an already troubled global sector. Economic ministers in Asia have predicted a slowdown in all regions. In China and Japan the banking system and their politically-sensitive inflation figures prove an economic decline. Prediction by the same ministers for the coming months in one or two years ahead the uncertainties will continue, and the world economic situation will be even more severe. With turmoil in the financial markets showing less then dismal growth, the battle against a potential recession and depression prolong each global community’s action as they try to muddle through.
There is neither relief nor exit from the Eurozone debt crisis. Each bailout only multiplies spreading the infection to other nations New worries of a third bailout for Greece, another for Ireland, Portugal, Italy, Spain and now with France only proves the inability to fix the economic problems. The new financial nightmare of a downgrade for France is heavily fuelling stock sell offs.
Nervousness stems from America. As the average person in the US continues to take a beating, hoping the economy will not bottom out, a lack of growth and faith in the policymakers renew daily. The world witnessed the general weakness just last week when the stock market crashed, and Friday traders ran back and forth as the CME group raised gold margin requirements 22%.
While the Piratical action only made investors firm in preserving their capital, the margin requirement proved the value of gold as real money and still 6.8% above the norm. Unlike paper, gold will continue to hold its value over the long term. The global flight to gold has been strong. It pushed the yellow metal up to $1800 in August 2011, a perfect indicator in gold ’s future run.
With the global economy continuing its downward weakness, gold is an even more important financial asset. Bloomberg predicts a 2012 price of USD 1,938 an ounce for gold, other forecasters such as JP Morgan anticipate a future price as high as USD 2,500. “Many countries have invested heavily in gold reserves during the last two years to bank against debt crisis. At a time when economic uncertainties are looming around the world, investment in gold represents a wise alternative for safety,” says the Regal Asset Team of Analyst.