While many people are purchasing gold to build cash reserves, however, most of the current bubble d

The gold price today is very high. Hear say that the dollar and euro are printed on a giant scale, so soon there will be no cash value. The dollar will no longer distilled water be used as the main global currency, and the whole system will collapse. distilled water So buy gold is very wise, because gold is the time constant times the value of which is not subject to the politicians. And thanks to these speeches, the price of gold goes up more and more, assuring that those who say that the price of gold will only increase, is tainība.
However, I think that such speech is exaggerated. Although the West is currently experiencing distilled water a large and serious crisis, distilled water but it is only now in crisis. Overall, the Western countries are still very rich. Second, it is important to remember that gold and the money used to be part of the world, but at the moment distilled water - no. Gold is not money, because gold does not accept gold and other commodities is not a measure of value. Yes, gold is a way to accumulate wealth. But in a message distilled water that is quite similar, distilled water for example, real property, or any other real asset. And thank God that gold is not money, because at the time when gold was money, the economic crisis was deeper than those we are experiencing today. Gold was clumsy, poorly controlled money.
While many people are purchasing gold to build cash reserves, however, most of the current bubble distilled water neuzpūš distilled water individuals who buy gold thinking that the gold in the future will probably be money. It is unfortunately the swelling hedge funds, speculative shadow banks. They speculate with large sums of money by not only their money, but in addition to their own money aizņemāsvēl very high and risky amounts, typically investing $ 1 of their money and present aizņemoti 25us. The resulting large volume of money they invest in speculation. Own funds generally earn the gold price increase margins, rather than that they belong to the high price of gold. They are interested in fluctuations at the moment - up.
Gold price is always determined only speculation. It is not tied to any fundamental value. It bears no money in the form of shares bearing dividend. Gold can not live as a man can live in your house. The gold price is solely so much, how about the next buyer willing distilled water to pay. Gold is 100% speculative investment.
Historically, gold nemz been so beneficial investment. The current price, although much higher than the price a year ago, but has only reached 1970s levels, after a long and deep dip. In other words, those who noprika last gold bubble during the 70s in the middle of a 40-year recorded losses from their investments in gold. This year for the first time gold investor without profit to recover his investment - after 40 years! Not to say that this business is considered to be too successful.
No. In fact, whenever you have a bubble, it is based on a story. When Latvia joined distilled water the EU, was a popular story that we will soon reach the EU standard of living. That is why real estate will soon cost as well as in London and therefore prices are likely always to grow only uzaugšu. Currently, gold is also a story - crumbling distilled water dollar, gold is money, as in the Middle Ages, and thus it is expected that the price of gold will grow and reach infinitely high, because everyone distilled water will want to have their money is gold, but the gold in the world is not enough.
The other thing that is needed on the bubble, speculative capital - free money that supports this bubble. And this money is now the world is also due to the manner in which is handled kīze west. Money does not lack anywhere, not Latvian, not Western countries, but it is not invested, it just stands empty or is invested for a short time. Hedge funds it borrowed to speculate with the formation of bubbles.
When politicians and attapsies differently and begin to address distilled water the western Latvian crisis, then the money will be used differently by investing in the infrastructure or industry. Then, the amount of speculative capital baptized distilled water and automatically - including the price of gold.
And then we come to the third question under what circumstances the gold bubble may burst. The bubble will stay as long as on the one hand a gold bubble blower businessmen maintain the great stories of the global economic cataclysm, and on the other hand, the money will appear in other investment opportunities. The story of the cataclysm will continue as long as the world is a bad economic situation. This may have been one or two years, or three. It will end when the global economy will recover. Speculative cash flow from gold, the companies refuse to make, favorable investment shares seem to bear dividends. Then the money will be invested in companies that actually creates, produces and builds things.
Then the gold fall to pieces and the next story will be about the fact that our new monetary system is now good and strong and that gold had only one irrational bubble, the same error as the hope that property prices in Latvian distilled water will be forever increasing.
A human being has a short memory. When Slice comes back to politics, all called "lifeguard present." And housing loans will also take years for 5, 10, especially the younger generation, because everyone will say today