Are You Waiting Till The World Ends? – The Weekly Gold Forecast

Monday, 14 October 2013
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Published in Gold Investing
Certainly one benefit of waiting till the world ends to buy gold, is that you don’t have to worry that much about price. Chances are that the party you buy it from will be more worried about where he’s going to hide and where his next meal is coming from, than the price he’s going to charge you for his gold stash. Another benefit of buying then is you don’t have to be all that concerned with technical indicators. Will you really care if you defy a trend line that indicates you might get a better deal next month, if you know that next month probably won’t happen?


Silly as all this sounds, there really are investors who’ve been waiting till the end of the world to buy gold. (I use the word “investors” advisedly, since the whole concept of investment implies some kind of belief in a future). If that’s not an impulsive enough scenario, consider that there are also those just as eager to sell the gold they already own for the same reason.  Jason Rotman, president of Lido Isle Advisors, a Newport Beach, California investment firm, put it this way in his quote for an article in last Friday’s Wall Street Journal:

“The markets are pricing in that the end of the world is not here …we’ve seen a lot of selling and I think it’s going to continue.”

Unless you’ve been going about your business under a rock, you’re fully aware that, by “the end of the world,” Rotman is referring to the on-again-off-again conflict between Congress and the White House about the infamous debt ceiling about to stare us down in only three more days. Over the weekend, financial leaders from the World Bank and the International Monetary Fund convened to discuss the problems with the international economy, and all eyes turned towards this one overwhelming issue.

When pressed by a French banker at a Washington DC meeting of the Institute for International Finance, about what the United States intends to do about its budget, Treasury Secretary Jacob Lew, according to this morning’s New York Times, seemed to throw up his hands with a response that’s not exactly consoling:

“We recognize that the United States is the anchor of the international financial system. With the deepest and most liquid financial markets, when risk rises, the flight to safety and to quality brings investors to U.S. markets. But the United States cannot take this hard-earned reputation for granted.”

Apparently then, not even embarrassment before the international community has caused our leaders in Washington to budge. Congress and the White House continue to rearrange deck chairs while our ship approaches the iceberg.  And guess what: the value of the US dollar is sliding.  If all this news doesn’t represent an invitation for you to purchase gold, what will? Think about why the world’s central banks buy and store gold, and then consider these words from

“The true value of gold for a central bank – and for a nation – is that when its currency is threatened, whether by deflation or inflation, confidence falls in national currencies. Amid the worst circumstances of war-time, gold is exchangeable, even between enemies. This quality transcends its value as ‘just’ money.”

I don’t know about you, but I find the observation that gold is “exchangeable, even with enemies” especially persuasive. If you don’t want to go as far as labeling the folks in Washington your enemies, will you at least concede that they’re not your friends?

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