Gold up $1410.00… Silver over $33.00… Oil over $94.00… and intensifying against another hostile global dilemma! As the world awaited speech from Gaddafi, “vowing to fight the growing rebellion until his “last drop of blood,” today, he ordered security services to start sabotaging oil facilities. They will start by blowing up several oil pipelines, cutting off flow to Mediterranean ports. This sabotage, according to the insider, is meant to serve as a message to Libya’s rebellious tribes: It’s either me or chaos.” Sources tell Time’s Robert Baer: “the already terrible situation in Libya will get much worse. Among other things, “Qaddafi (we say, Gaddafi, you say Qaddafi,) has unequivocally declared his intention to massacre his own people,” said Shadi Hamid, director of research at the Brookings Doha Center in Qatar. And, to cut off, even partially, the US military and naval Persian Gulf forces … or to cut off the flow of nearby pipelines, the world will feel a major economic strap.
In Washington, U.S. Secretary of State Hillary Clinton said the Obama administration is watching events with “grave concern,” and called on Libya to “end the violence.” She said the U.S. will take “appropriate steps,” which she did not describe.
Hardly anyone in Libya could imagine standing up to, let alone overthrowing, Qaddafi just a few weeks ago, but Tunisia’s Zine El Abidine Ben Ali and Egypt’s Hosni Mubarak turned out to be much more vulnerable than anybody expected. The fear that so grips the hearts of the Middle East’s peoples is breaking…this is the quantum rise that will take us for a ride in oil and Gold. However, “While I do believe gold and oil offer both short and long-term investment opportunities,” says Sprott Resource Corporation, I am not depending on the problems in the Middle East alone to move prices higher. Governments continue to print money, which should support gold prices for the foreseeable future, and there seems to be no end of course, in sight for the world’s thirst for oil.” “As long as the central banking system stays intact globally gold and silver will rise indefinitely” says Ron Fricke president of Regal Assets in a recent conference.
“During such times of geopolitical tensions and economic crisis hitting countries around the world,” says noted investment advisor Marc Faber, “it is wise to hold gold and silver.” Faber, who is famous for his prediction of the US stock market crash in 1987, said that commodities, especially gold and silver will be the wisest investment options for people in the wake of rising inflation and troubled economies around the world. Gold and silver would continue to provide safety as increasing demand for oil in emerging Asian economies and recovering US demand could lead to increasing geopolitical tensions in the Middle East.
He also said that the US dollar could rebound in the next few months, but in the long term it would depreciate as the Fed is likely to expand its money-printing measures beyond the $600 billion already announced up to the middle of this year.
The $64,000 question is, since oil has been spiking on fears of a Libyan disruption, and today, the country declared force majeur, effectively canceling oil contracts, will it affect gold? Contrarians are betting that it will take the yellow metal into high territory. The HGNSI currently stands at 45.3%, just half of its all-time high of 89.6%. In other words, despite gold being only a few dollars shy of its all-time high, the average gold bug is still allocating more than half of his gold portfolio to cash. That doesn’t guarantee that gold will go up, of course. But it does mean that there is a lot of sideline cash ready at a moment’s notice to be shifted into the gold market to propel gold higher.
This week, the World Gold Council (WGC) said, Gold will be interesting to watch as a barometer of good and bad government policies pop its face. In countries such as China, where the embrace of free market principles has ushered in economic growth, gold demand levels should remain strong. This is what makes today’s gold market different from the 1970s. Back then, today’s emerging market powerhouses, such as China and India, had no global economic impact. Now, these countries aren’t just at the forefront of the gold market, they are global leaders in economic growth. As a note, it is by no coincidence that 30 years after Deng Xiaoping took office in China and began instilling the concepts of free markets; the country has grown to become the world’s second-largest economy behind the U.S.
In reality, gold is standing the test of time once again! In terms of its purchasing power during other known human history, war, political unrest, and financial dilemmas, it has caused people to turn to Gold as value store. And, while the global economy runs on oil, and much of that oil gets shipped through seven narrow straits, when there’s even a rumor of a choke point getting blocked, people will turn to gold…And there have been many rumors in Egypt.
Source: http://goldcoinblogger.com
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