Monday, 21 November 2011
By: Clive Maund
Gold has behaved as predicted in the last update, which was two weeks ago. It advanced a little further into nearby resistance, before reacting back quite sharply on Thursday. However, whereas in the last update we were looking to buy on this dip in the expectation of renewed advance, we are now more cautious, due to mounting evidence that politicians and world leaders may soon be overwhelmed by deflationary forces despite their strenuous efforts to keep them at bay by means of endless QE.
For gold's strong uptrend to continue we need to see continued currency debasement and inflation and the maintenance of sufficient liquidity to head of any incipient credit crises that could quickly cause interest rates, which have been artificially suppressed for years now, to skyrocket. The trouble is, however, that various parties are starting to break ranks and trying to use the quaint old fashioned methods of dealing with debt, such as trying to pay it down and reining in budgets and imposing austerity measures etc. The Republicans in the US are trying to enforce a reduction in the Federal deficit, or least retard its rate of rate of growth, which is now legally mandated if the so called "Super Committee" fails to come up with big cuts by the 23rd of this month. In Europe we are seeing attempts to impose austerity in Greece and Italy and soon other countries. While these efforts are commendable they should have been made years ago - now it is far too little too late, as the debts have grown to gargantuan proportions and are now completely out of control. They are like a giant voracious beast that demands to be fed, and the refusal to feed this beast by the likes of Mrs Merkel of Germany with her matronly "No!" are going to cause it - are causing it - to turn very nasty indeed.........
http://news.goldseek.com/CliveMaund/1321862520.php
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All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.
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