The mechanical beast in the economy continues to enslave the markets. Unable to align the financial system, a world panic is ensuing. As one tremble after another shakes the market, people are scrambling for safety. Investors reach for the safety raft of gold instead of US treasuries, which yields moved even lower despite the S&P downgrade of the US credit rating. Those who disputed gold as a life raft aren’t too happy today for not preparing.
Another kick in the teeth is the debt crisis in Europe that is a continuous life and death grip, which has infected lending rates from banks and the IMF. Germany and most lately France which (could be the next to loose AAA rating) are unable to patch up the economic dam, the leak continues to engulf the Eurozone block.
The US takes comfort in the Fed’s pledge to keep interest at zero, with an inevitable QE to quell fiscal fears and plug up the deficit. The implication of high inflation and interest rates will take precedence to further devalue the dollar. Keeping low rates through 2013 leaves only QE and with such liquidity steps, comes greater volatility. When all interrelated economic printing accounts eventually cave in, a major stock market collapse will eclipse the market. These may look pessimistic in view, but in fact are the economic demons facing the world. Perhaps no bigger than in the past, but at present, the inability to solve them has enslaved the world with the US locked into it with ideas and political battles for power. Perhaps common sense beats a Harvard degree.
Austerity measures, as an official action taken by a government in order to reduce the amount of money that it spends has not worked. Monday’s stock market crash has proven that. As each new ideological economic machine enters the market, it creates a global domino effect. Without aligned interest, problems continue to emerge without a plug. Thus, gold re-approves history once again. “Trading patterns from the dollar to gold is an opportunity to profit today and for the immediate future. Investors look for safe havens to pour their money into. Knowing the direction of the market is important today. One needs an edge,” says Regal Asset Team of Analyst.