Sunday, July 11, 2010

Gold soars as global economic confidence dives

Dampier believes gold will continue its upward trajectory because "governments have printed money like there is no tomorrow, debasing their currencies. I wouldn't be surprised if they print even more before the crisis is over," he says.
In their worst moments, panicky investors and savers visualise a world that has been turned upside down by a sovereign debt crisis that breaks both the euro and flattens the once mighty dollar. As the west sinks into a quagmire of its own making, demand plummets and the world is dragged into another Great Depression. Even the emerging markets of China, India and Brazil are affected as export markets shrivel. Political instability follows, with riots on the streets and unemployment at levels not seen since the 1930s.

SHOOT: I've been encouraging investment in gold [real gold, not shares] since 2005.
clipped from

Goldfinger, the villain of the eponymous James Bond film, hatched a plot to increase the value of his bullion by detonating a nuclear device inside Fort Knox, making America's gold supply radioactive for 60 years. No less exciting, though rather more unsettling, is the real-life drama taking place on the world's financial markets, where investors have piled into gold on fears that capitalism is about to crumble.

As a result, the gold price has soared to record levels, rising 9% this year to reach a peak of $1,264.90 (£834.44) an ounce, with influential names in the world of finance predicting it could top $2,000. Among them is Jim Rogers, the investment guru who called the start of the commodities rally in 1999.

Cooper says there is concern we could be heading towards a second leg of the financial crisis and governments "could be tempted to print more money to dig us out of a hole. "That could precipitate inflation, making gold even more popular as a safe haven."

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