Investors in gold are unusual creatures. Cagey, awake, a little suspicious, always has a foot in the door no matter how good the room looks. If not real history buffs, they firmly understand what happened in our economic past … and that’s why they have a pretty good idea of what’s going to happen in our economic future.
So, investors in precious metals are looking forward to the Obama administration and what is being prepared for the economy. Needless to say, most have their feet firmly placed on the door.
Putting aside the positive social implications of the first black president of the United States, the danger of combining another possible big consumer in the White House with our current economic problems could be the formula for economic Armageddon, many believe.
Which, of course, would be fine with gold.
They all came big consumers
It’s not that President Bush was a very solid clue. From the 2001 budget of $ 1.9 trillion, the Bush administration submitted the 2009 budget of $ 3.1 trillion an incredible 63 percent.
In a word, fuck.
However, such spending was somewhat offset by three years of Congress under democratic control. What is happening now that we have pulled the lever for that one-armed bandit who voted and all that was devised by a Democrat?
That he does not insult the members of that party in any way. Both sides, as mentioned, have this worrying situation compulsive consumption disorder (CSD). But in an environment of high spending last year – a controversial $ 700 billion bailout and a billion bailout plans – that the president and Congress had, of the same party, with a possible majority failing, eager to spend even more trucks of money, maybe it’s just the wrong move at the wrong time.
“President Barack Obama will have the majority in the new Congress needed to realize his plans for increased spending on national infrastructure and a huge package of fiscal stimulus,” wrote Peter J. Cooper of Arab money.
Again. We could have been much better off if Washington had been hopelessly stagnant for the next four years.
Four reasons why Obama could be good for gold
So why is it wise to stick to your gold in 2009 (and maybe even add more to your portfolio)? Four reasons:
1 / “Our last, best hope“Syndrome. According to an Associated Press polls, some 72 percent of Americans believe, after the recent election, that President Obama will turn the economy around and still have a happy ending.
That’s all right … for now.
Despite this current excitement over our bright, new president, the outlook for the 2009 economy, at least in the eyes of analysts, is almost uniformly bleak.
Here’s one example: “The world economy will suffer a significant downturn in 2009 … It’s a bleak scenario,” admitted Antonio Garcia Pascual, International Monetary Fund.
And that’s just the problem. If Obama represents America’s “last, best hope” – and the poor economy is moving up anyway – our Obama optimism could evaporate, our collective hopes could crumble, and things could become ugly.
Do we have the last, best hope after Obama?
We are working. Gold.
2 /Predicted international crisis. Both Vice President Biden and Colin Powell alluded to it. “Problems will always be present and there will be a crisis that will occur on January 21, 22 that we don’t even know about at the moment,” Powell told Meet Press on October 19, 2008.
Overlooking his blatant contradiction – that we still don’t know what that crisis is, we know enough to predict it will happen on January 21 and 22 – an international crisis to test our new president, whether it happens in those days or someone else time over the next few years, would cast even more fear and uncertainty on already overcrowded Americans.
Fortunately, the antidote to that kind of fear has always been gold.
3 / Show me the money. Talk about big waste, according to the October 24 issue of the magazine Wall Street Journal, President Obama promises to spend another 4.3 trillion even with tax cuts.
So where did he get all that money from?
“A trillion here, a trillion there, and you’re talking real money very quickly. All in all, Mr. Obama promises at least $ 4.3 trillion in increased spending and reduced tax revenue from 2009 to 2018,” Cato Institute wrote Alan Reynolds in that article on the WSJ.
Reynolds concludes, “Mr. Obama has given no idea how he intends to pay for his health insurance plans, or double overseas assistance, or any of the other 175 programs he has promised to expand. the harsh reality is that this Democrat’s search for hundreds of billions more in revenue each year would have to reach deep into the pockets of people much lower on the economic ladder. Even then, I would be brief. “
Okay … so if our new president doesn’t have a viable way to generate funds to pay for his 175 programs, where does that leave us? With only two ways to increase taxes or unreasonable tax increases or …
4 / The word H. Hyperinflation. “Come on,” one might say. “Things wouldn’t get so bad.” Well, let’s hope so. But as it is, even without Obama’s 175 programs, we are already more than a few miles down the hyperinflationary path.
Where do you think these rescue dollars come from? Kind aliens visiting our galaxy? No, they come from the printing press of the Ministry of Finance.
Which means they are generated from the air.
Wrote I’m looking for Alpha Jason Hamlin, “… top investors such as Jim Rogers, Robin Griffiths and Jurg Kiener now predict that global central banks’ insistence on printing a way out of the economic turmoil is triggering a hyperinflationary Holocaust, hitting gold from accelerating to $ 2,000. , because the demand for precious metals exceeds the supply. “