Well, here we are in the beginning of September, notable for historically being a month in which the price of gold goes up so as we might expect, gold has been pretty perky lately. It was up around $20 per ounce yesterday and as I write this, it's up about $20 again for today. It appears that gold is attempting yet another assault on the $1000 level sometime soon.
One interesting observation is that the fundamental issues that have existed since the beginning of the gold bull market that started in 1999 have not changed and, if anything, they have gotten worse. Gold is the safe haven from geo-political and economic risk and it reflects the degree of concern at any given time.
Our government is particularly troubled about the perception of risk because people putting their money into gold are not putting their money into the economy. Since 70% of our GDP comes from the consumer, it follows they the government wants people to consume, not save. (It's ironic that excessive consumption is largely why we're in the economic mess that we are.) So it is predictable that we will see the government making every effort to instill confidence in the people about the economy. They're even rolling out VP Joe Biden to tell us about how the stimulus played a "significant role" in the recovery (in the past tense).
Yes, it's really all about confidence. Confidence in our politicians, our economy, and the strength of our dollar. The game will go on as long as there is confidence so we could accurately say this is a game of confidence or, a con game. A con game works until it doesn't. From the link:
The gold price reflects the degree of confidence inversely or better, we could say it reflects the lack of confidence. It's an invaluable tool for surviving and winning the con game being run on us.
