, IncThe gold price will climb back up to its trend – in time.
June 15, 2011 – For most of the historic six-week slide in equities the price of gold moved upward, as would be expected. Then last week it too began to slide. And now everything is up. That is either a sign of optimism or resignation.
“Reports point to lower food prices, more hiring,” shouts an AP headline. “How many stocks should you own?” queries another. “Stocks shake off slump on retail sales news,” says a third. That is the everyday news we American see, and apparently a lot of us still believe it, even now.
Consider the positive reports on retail sales. Lest we forget, the horrendous tornado season has left millions without the barest essentials. By hook or by crook those had to be replenished, and that is one huge boost in sales. By the logic of the AP release, the economic crisis would be solved if only half the population had their world wiped out.
Another AP report, however, released just the day before, discussed the results of a survey it conducted with 38 leading economists. “The economists are lowering their forecasts for job creation and economic growth for the rest of this year,” the survey revealed. But the economists also agreed that the Fed “shouldn’t bother trying to stimulate the economy … [which] could make things worse by unleashing high inflation and disrupting financial markets.”
The plain truth, say Wells Fargo chief economist John Silvia, is that what we really need is time – time to “shrink huge debts amassed in the mid-2000s” and let the housing market bottom out and begin to recover. “There is no magic bullet. A lot of this stuff just really needs to be dealt with. It’s not a question of stimulus.”
Unfortunately such candor does sit well with politicians. The only time they are concerned about is that between now and the next election, so they see to it that we are spoon-fed our daily dose of sweetened Pablum. America’s addiction to the quick fix makes it easy for them to play us like a yo-yo.
We need to cut the string. Neither false optimism nor resignation will do us any good; only positive action will keep us going until our government stops playing games and starts dealing with the real issues.
It’s all about time. Time for the fools in charge to come to their senses. Time to switch the channel from the financial reports to some more entertaining fiction. And time to buy gold before the gold price once again rises to its trend.
Stewart Lawson
Senior Staff Writer - GoldPrice.net
