Gold Hits New Highs

So just what is happening around the world? Gold hit new highs of $1123 per ounce this week, the US dollar came under severe pressure and yet stocks continue to rise. Some call this the “jobless recovery” and cannot understand what the media mean by “green shoots of recovery.” Others are convinced that we will soon be out of global recession. So whom can you believe and what is the truth behind all the stories that we hear?

In my view, I tend to agree with those pundits (who are in the minority) who say that this recession/depression has a long way to go. The fact that millions of dollars have been thrown at our banking institutions around the world and now that some are showing positive balance sheets and are paying themselves record-breaking bonuses once again beggars belief. Do we have to go through the same scenario once again – and maybe the second time it will be even more painful? Or are there some serious politicians and leaders out there who can see alternative solutions that might actually turn this impending depression around?

This week I was heartened to see that the Wall Street Journal reported that “Merkel (German Chancellor) Vows to Cut Taxes Despite Rising Job Losses.” This has made her very unpopular with some and she has received much criticism for her approach. In fact, this could be the best strategy out there right now. Cutting taxes is a very intelligent thing to do in order to deal with the current economic uncertainty. By cutting taxes more monies will be in the hands of the consumers who may just spend more and thus boost the economy. Cutting taxes is also a great way to encourage small businesses to hire people which could also be the answer to long-term job creation. Yet Merkel is being criticised for this longer-term stimulus proposal. She seems to be the first world leader who is willing to go against the tide and propose a new strategy that is constructive and promises to bring Germany out of recession sooner than many other countries. If she actually implements this policy, then Germany may be a country to keep an eye on for investing your money for the future.

I predicted that gold would soar in value as it is doing, (against the opinions of many stalwart investment analysts) and I think it still has a long way to go. So don’t be kicking yourself thinking that you should have bought earlier – try to buy when it goes down a little and buy incrementally so that you can take advantage of the dips when they occur.

We live in interesting times – the main thing is to try to protect yourself and your family first, then adjust your mindset so that you are aware of the possible outcomes around you and if necessary change your strategy to suit the prevailing conditions.