Concern over national debt shows little sign of fading
One reason that dealer gold remains such an attractive investment is the widespread concern that Congress will fail to take sufficient action to scale back the rapidly rising national debt.
The national debt is expected to exceed $14 trillion this year due to a combination of factors such as reduced government revenues and increased spending for stimulus purposes. The sheer size of the debt has led to greater attention being focused on fiscal responsibility, but so far, tangible attempts at fiscal responsibility seem to have largely been lacking among the nation’s leaders.
Sovereign debt woes could spread further
Greece is just one reason to be concerned about sovereign debt levels.
- By John March
Gold and silver dealers could be poised for some extra business as investors start to speculate more about what other European countries could be teetering on the brink of a sovereign debt crisis.
The problem is especially pronounced in the current economic climate with so many countries having dramatically increased their spending as part of their respective stimulus efforts. However, when the recession got underway, many of these countries were already carrying potentially heavy and expensive debt burdens.
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Gold momentum enjoys a strong week
- By Bruce Sands
Commodities, including gold, had a good week in part because of growing economic optimism in various countries around the world.
A report by Bloomberg cited positive economic signals in Australia and China as fueling gains in industrial metals including copper, while concerns about sovereign debt problems in Europe were further fueling the momentum for investing in gold coins and similar options.
Overseas gold demand expected to remain strong
China has an increasingly important role to play in the global gold market.
- By John March
The market for dealer gold is likely to get a considerable boost in the coming years from emerging economies like India, and perhaps most significantly, China.
A recent article in Canada’s National Post newspaper quotes analyst Alan Heap of Citigroup Global Markets as saying that China is the “most important source” of gold’s demand growth in the future, also noting that in 2009, demand in the country was up by 10 percent.
The newspaper noted that gold is getting increased attention from Chinese investors in light of the recent decision by the government to slow the pace of bank lending activity, which has helped to fuel concern about possible inflation.
Also, the report added that Asian banks have great potential to increase their gold holdings because they hold relatively little of it in comparison to European banks.
The financial sector is coming out against proposed new regulatory efforts.
Thursday, January 28, 2010
The financial sector is coming out against proposed new regulatory efforts.
- By John March
The banking industry is warning that efforts by the White House to impose a series of new regulations could backfire by undermining the economy at a time when it is still particularly vulnerable.
A report in London’s Evening Standard newspaper notes that many in the finance industry see proposals by President Barack Obama and British Prime Minister Gordon Brown as unnecessary and potentially burdensome to the industry.
One executive was quoted as saying that if the proposed rules, which in the UK include a tax on all financial market transactions, turn out not to work, the results could fall somewhere between stifled growth and “another crisis.”
Overall, such criticism is reflective of the general uncertainty and unease that surrounds the economic recovery, which in the U.S. has so far been a slow and jobless one. There is also concern that a double dip recession could become apparent in the coming months, largely due to factors like the unemployment situation.
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