Global Economy
The outlook on the global economy continues to worsen. The United States
and Great Britain further damage their respective budget levels by a
prolonged and costly war on terrorism. The estimate for the United States
involvement in the war on terrorism is $200 billion. Clearly, an impediment
to an economic recovery is fighting a costly war. Both economic powerhouses
are slipping further back into recession. Unfortunately, the ripple effect
spreads across all other countries, slowing their growth rates as well.
Poor Growth in the Global Economy
With little to no growth in many of the leading economies, the chances of a
quick recovery are slim. Interestingly, the main economy showing signs of
growth is China. The early industrial stage of China’s economy is creating
a heavy demand for hard commodities. Commodities have therefore gone on a
nice run and have created healthy returns for savvy investors.
China’s robust growth makes the case for gold stronger. China has pegged
its currency to the U. S. dollar. The rapid growth of China, coupled with a
sluggish American economy, increases the strain on the U.S dollar.
Specifically, the heavy growth in China is increasing their demand for U.S.
goods, which causes the American trade deficit to widen. And as you know, a
trade deficit mixed with geopolitical turmoil will weaken the U.S. dollar
and strengthen the price of gold. This vicious cycle will likely continue
and that’s why many experts are begging China to float its currency.
The global economy is very similar to steering a freight liner. Major
directional changes are caused by drastic turns of the wheel and waiting a
long time for the ship to react. The point here is that the global economy
takes a long time to react to fiscal and monetary stimulus. Ongoing wars
throughout the world only delay the recovery. As an investor, you have to
make educated decisions on where you’ll put your savings. Precious metals
are one of the only investments that will appreciate under these
conditions.
Global Economy
The outlook on the global economy continues to worsen. The United States
and Great Britain further damage their respective budget levels by a
prolonged and costly war on terrorism. The estimate for the United States
involvement in the war on terrorism is $200 billion. Clearly, an impediment
to an economic recovery is fighting a costly war. Both economic powerhouses
are slipping further back into recession. Unfortunately, the ripple effect
spreads across all other countries, slowing their growth rates as well.
Poor Growth in the Global Economy
With little to no growth in many of the leading economies, the chances of a
quick recovery are slim. Interestingly, the main economy showing signs of
growth is China. The early industrial stage of China’s economy is creating
a heavy demand for hard commodities. Commodities have therefore gone on a
nice run and have created healthy returns for savvy investors.
China’s robust growth makes the case for gold stronger. China has pegged
its currency to the U. S. dollar. The rapid growth of China, coupled with a
sluggish American economy, increases the strain on the U.S dollar.
Specifically, the heavy growth in China is increasing their demand for U.S.
goods, which causes the American trade deficit to widen. And as you know, a
trade deficit mixed with geopolitical turmoil will weaken the U.S. dollar
and strengthen the price of gold. This vicious cycle will likely continue
and that’s why many experts are begging China to float its currency.
The global economy is very similar to steering a freight liner. Major
directional changes are caused by drastic turns of the wheel and waiting a
long time for the ship to react. The point here is that the global economy
takes a long time to react to fiscal and monetary stimulus. Ongoing wars
throughout the world only delay the recovery. As an investor, you have to
make educated decisions on where you’ll put your savings. Precious metals
are one of the only investments that will appreciate under these
conditions.