Wednesday, October 7, 2009
Thanks to the Obama administration, gold has topped $1,050.00 per ounce. Think about that. An ounce of gold isn't very big due to it's atomic weight. When you hold that little lump in your hand you have to say, "Are you kidding me? This little lump is over $1,000.00?" Yes, but it is one thousand almost worthless dollars.
There are two main reasons why the price of gold is going up. First of all, the value of your dollar is going down. Ever since Obama started stimulating the economy by printing more money and saturating the marked with it, the value of your dollar has been speeding downward. Therefore it takes more dollars to buy an ounce of gold.
Secondly, because your dollar has been becoming worth less, thousands are buying gold with their dollars as a hedge against inflation. This has put pressure on the gold market, causing the price of gold to go up. Gold is an international currency and will one day be accepted where the dollar is not.
Is gold a good buy? For now, yes. But if the US economy recovers and the value of the dollar goes up against other currencies, you can expect the price of gold to go down. But the price of gold will not stay down because the demand will always increase.
But did you know that one day bread will be more valuable than gold? The Revelation says that in the last times a piece of bread will buy a bag of gold. The day of world wide famine will come. Anything edible will be worth a lot. Safeway and King Soopers will be asking a lot for their food, if they have any to sell.
I wonder how many bags of gold a cup of Starbucks coffee will bring.
For now I will drink my Starbucks and buy Apple Computer stock, which seems to be doing better than gold right now. (AAPL) If you have $190.00 you can buy one share. Or you can buy a share of Ford Motor for $7.50.