Gold Jumps To Over $900 On Fed's 0.75% Interest Rate Cut
Thursday, 24. January 2008, 15:57:47
Definitely, for those invested in gold, the Federal Reserve's recent interest rate cut didn't take long to be reflected in the price of gold: it was just a matter of days for financial traders world wide to demand and receive more for gold.
Loose monetary policy, in the form of lower short-term interest rates, increases the supply of paper money, and debases the currency and traders world wide ask more for gold denominted in dollars.
I've been recommending that for quite some time that one go long long gold and short the U.S. Treasury Bonds, and short closed end municipal bond funds and today the rewards are starting to come through.
Long GLD and Short TLT provides a 2% gain in early morning trading.
Long GLD and Short VGM provides a 1% gain in early morning trading.
Sovereign USA and its power, manufacturing base and economy is quickly fading away. (Deesillustration.com).
Summary And Investment Application
The Fed's actions continually serve to debase the dollar, which compels foreigners to eventually sell their investments, and short sell the stocks they formerly owned; it may take a few days or a few weeks, but inevitably rate cuts inflate the price of gold.
I recommend that one be invested in the gold ETF, GLD; and use margin credit to 'dollar cost average' in 'sells' -- 'puts' of the the 20 to 30 Year US Treasury, TLT, and closed end municipal bond funds, VGM and others.
Loose monetary policy, in the form of lower short-term interest rates, increases the supply of paper money, and debases the currency and traders world wide ask more for gold denominted in dollars.
I've been recommending that for quite some time that one go long long gold and short the U.S. Treasury Bonds, and short closed end municipal bond funds and today the rewards are starting to come through.
Long GLD and Short TLT provides a 2% gain in early morning trading.
Long GLD and Short VGM provides a 1% gain in early morning trading.
Sovereign USA and its power, manufacturing base and economy is quickly fading away. (Deesillustration.com).
Summary And Investment Application
The Fed's actions continually serve to debase the dollar, which compels foreigners to eventually sell their investments, and short sell the stocks they formerly owned; it may take a few days or a few weeks, but inevitably rate cuts inflate the price of gold.
I recommend that one be invested in the gold ETF, GLD; and use margin credit to 'dollar cost average' in 'sells' -- 'puts' of the the 20 to 30 Year US Treasury, TLT, and closed end municipal bond funds, VGM and others.
WIDGETIZE