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Contributors The Real Reason Why Gold is Moving Higher
The Top Gold Stock of 2012

This grossly undervalued gold miner is set to surge in the coming months. Learn more in our free report.

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Some people think gold is in a bubble. They believe gold moving from $300 to $1,750 in the last decade doesn’t make any sense. But the chart below suggests otherwise. When you look at the U.S.’s finances, it’s easy to understand why gold has been marching higher over the last 10 years.

The chart shows the government budget as a percentage of the size of the economy on the left and the price of gold on the right.

When the U.S. budget is above 0%, it means we have a surplus. We’re bringing in more than we spend. And when the budget is negative, we have a deficit.

The last time we were living within our means was in 2001. Since then, we’ve been spending more than we bring in. And in the last four years, the spending has really gotten out of control. And that explains gold’s massive rally.

Gold Rallies When We Live Beyond Our Means

See larger image

Our budget situation actually improved in the 1990s, moving from a deficit of 5% to a surplus of nearly 3% during the Clinton administration. During that period, gold went nowhere.

The yellow metal started its major rally in 2001, when the surplus turned into a deficit. As long as this trend of budget deficits persists, gold should continue to move higher.

Today, we don’t have any solid plans to control this deficit. That’s why buying gold remains a good idea.

Regards,


Evaldo Albuquerque
Senior Analyst

Recent posts by forexnews

The Top Gold Stock of 2012

This grossly undervalued gold miner is set to surge in the coming months. Learn more in our free report.

Enter your Email Address Here:

Privacy Policy
Sovereign Investor FAQ

Some people think gold is in a bubble. They believe gold moving from $300 to $1,750 in the last decade doesn’t make any sense. But the chart below suggests otherwise. When you look at the U.S.’s finances, it’s easy to understand why gold has been marching higher over the last 10 years.

The chart shows the government budget as a percentage of the size of the economy on the left and the price of gold on the right.

When the U.S. budget is above 0%, it means we have a surplus. We’re bringing in more than we spend. And when the budget is negative, we have a deficit.

The last time we were living within our means was in 2001. Since then, we’ve been spending more than we bring in. And in the last four years, the spending has really gotten out of control. And that explains gold’s massive rally.

Gold Rallies When We Live Beyond Our Means

See larger image

Our budget situation actually improved in the 1990s, moving from a deficit of 5% to a surplus of nearly 3% during the Clinton administration. During that period, gold went nowhere.

The yellow metal started its major rally in 2001, when the surplus turned into a deficit. As long as this trend of budget deficits persists, gold should continue to move higher.

Today, we don’t have any solid plans to control this deficit. That’s why buying gold remains a good idea.

Regards,


Evaldo Albuquerque
Senior Analyst

Recent posts by forexnews