fear over the US dollar has countries buying gold

[Gunco]

India buys 200 tons of gold


Move shows little confidence in the dollar


Posted on Tuesday, November 3, 2009 12:17 PM
The dollar is still losing its luster as the foreign reserve currency of choice.



India has bought 200 tons of gold from the International Monetary Fund at $1,045 an ounce, which is close to a recent record high of $1,070. The entire transaction is worth almost $7 billion.



The move is seen as a way for India’s central bank to move some of its capital away from investments in the dollar.

The IMF may sell another 200 tons of gold in the relatively near future and most experts expect that the buyer will be China, which has foreign currency reserves of $2 trillion and might like to have its own hedge against the value of the American buck.

India is being explicit in its concern about the long-term value of the dollar. One senior official of the central bank there told The Wall Street Journal, “It makes sense to buy gold as it will appreciate more than the U.S. dollar.”

The equity markets may stay volatile as the global economic recovery stays uncertain, giving central banks and investors another reason to move to gold as a “safe haven”.



The transition to the commodity may drive down the dollar’s value even further, which could help U.S. exporters, but that is bound to increase the concern that the dollar is no longer the most important exchange currency.

[4thIDvet]

Fear over U.S. dollar. I'm scared to. Could part of the problem be there is only a few commodities still made in America for sale on the shelves here.
Or was it the bailout of our banks to the tune of trillions in worthless paper that turned the tide.
The only damn thing selling in this country at record pace is guns and ammo.
Young people in this country want to work. They just have to move overseas to find a damn job.

[mauser1959]

I have been saying , including on here, that a person needs to buy metals. I think that we will still have a pretty large increase in both gold and silver, and conversely copper. It is time to buy hard assets, no matter what they are... from guns to butter, and lots in between.

[ACMcom]

Originally Posted by 4thIDvet

Fear over U.S. dollar. I'm scared to. Could part of the problem be there is only a few commodities still made in America for sale on the shelves here.
Or was it the bailout of our banks to the tune of trillions in worthless paper that turned the tide.

It's a vicious cycle. The gov't runs deficits which used to be financed by foreign nations, banks and wealthy individuals lending us the $$$ they got from selling things to us. When the deficits get bigger, the creditors are reluctant to continue lending, (This is described in the MSM as a "disappointing treasury bond auction".) so the Federal Reserve buys the gov't debt - with money it creates out of nothing. This makes all the other dollars worth less, which makes the creditors more reluctant to buy the debt which forces the Fed to create even more money.
we've now reached the point where the creditors won't buy new gov't debt and don't want to hold dollars or assets denominated in dollars because they know that hyperinflation (think Germany in the 1920s or Brazil in the '60's) is a real possibility.
In other words, we should ALL be scared.

[PuppyChow]

i'm all for people buying gold, it's just reaaaaaally high now, so invest in lead, cause those with the lead will get the gold if society breaks down