You've no doubt seen those television advertisements touting gold as a get-rich-quick investment. Well, it is a get-rich-quick proposition – for the seller!
The gold coin "sales pitchers" say it's worth its weight in gold. Well, yes. In fact, it always has been.
But as Cornell Ag Economist William Schulze noted recently at Cornell's Agribusiness Outlook Conference, today's gold prices are trading on fear induced by the global economic recession.
Would he buy gold today? "Certainly not!" he exclaimed. "When the economy recovers, gold will tank." While the U.S. economy is slowly mending, other economic powers such as China and India are booming.
The reason gold is being pushed so hard is that it likely has peaked (or is close to doing so) and sellers want to cash out. Think of gold marketers as not unlike Bernie Madoff – sans prison garb.
Schulze's crystal ball suggests we could easily have 4% economic growth over the next two years. He doesn't believe Americans were as emotionally scarred by this recession as our parents or grandparents were by the Great Depression.
But he also warned that 'If we (Uncle Sam) raise taxes, I promise we would move into a serious depression."
For what it's worth, I have to agree. While Uncle Sam talks of 9% unemployment, we really have closer to 18% effectively unemployed. Just because people have given up looking for jobs, but aren't counted by the unemployment offices, doesn't mean they're not unemployed.
An economy with that many unemployed is not in good health. Make sure your Congress persons understand that.
Your comments are welcome and wanted. Just click on “Add a Comment”.