Debt crisis over, stocks rise, gold falls


Well, you read it here first….two months ago: the debt ceiling crisis is over. If you thought the ceiling was the problem, you’ll now be among the Goforits buying stocks. If you’ve seen the price of gold plummet, you may be wondering if you should take profit.

Stick with Gold. Just as with the EU fix (they don’t do quick fixes, only slow ones) this ‘agreement’ in America is absolutely no solution at all to the US debt/economic structure problems. Nor is austerity alone an answer to ours. Nor is Chinese anti-inflation activity working. And Asutralia will fall hard when a combo of poor demand and high interest rates stop the CPR from buying its raw materials.

Think of it like this: every time a fantasist sees another Elastoplast on the melanoma and buys stocks, it makes it cheaper to buy into gold all the more. The strategy is foolproof for one simple reason: you’re right, and they’re wrong. Also, the Chinese can’t get enough gold as part of their drive to complete self-sufficiency. And as the Indian middle class grows, they’ll buy more and more of the stuff for decorative and religious purposes.

Two problems: one, bank paper can’t be trusted, because the banks are heading for another calamity. And two, bullion involves a ripoff premium, handling costs, and the difficulty at the moment of trading it once the balloon bursts.

The safest medium-term bet now is to buy into gold producer shares. That’s what I’m doing. It’s up to you what you do.

Please note that I am not licenced to give investment advice, and cannot take responsibility for any loss of money by readers acting upon my personal viewpoint