Gold: Zoellick Seeks Gold Standard
Debate
The Dynamic Wealth Report
November 12, 2010
by Robert Morris, Editor
World Bank President, Robert Zoellick, stirred up a hornet’s
nest this week ahead of the G-20 summit.
It all started with an op-ed piece Zoellick penned for the Sunday
Financial Times. In the article, the former managing director of Goldman
Sachs and Deputy Secretary of State proposed gold play a role in any new
global reserve currency that might replace the U.S. Dollar.
But before the ink was even dry, a number of commentators had seized on
Zoellick’s words as a clarion call for a return to the gold standard. Fans of the gold standard praised Zoellick as a hero. Opponents labeled Zoellick as the “stupidest man alive”.
-------------Sponsor-------------
Where Can You Turn $300 Into $1.3 Million Right Now?
Our own small-company specialist, Robert Morris, has found a
way to 'sniff out' tiny penny stocks on the verge of a major breakout. And
the timing for this has never been better.
You see, the system takes advantage of an obscure SEC regulation that
sends penny stock prices through the roof.
We've seen some stocks gain 852%... 5,450%... even 17,496% in no time
flat.
Click here
for the details...
-----------------------------------
Gold bugs read Zoellick’s comments a different way… they saw a reason
for gold prices to skyrocket.
Think about it for a moment. If gold becomes the standard for currency
valuations, central banks around the world will have to increase their
gold stockpiles. This huge uptick in demand can only do one thing… drive
gold prices dramatically higher.
But Zoellick wasn’t saying we should return to the gold standard.
Here’s the quote that has everyone fired up…
“The system should also consider employing gold as an international
reference point of market expectations about inflation, deflation and
future currency values.”
When taken out of context like this, you can see how the words are easily
manipulated. They’re just vague enough for a savvy commentator to claim
they call for a return to the gold standard. But when read in context,
the true meaning becomes clear.
Here’s what I mean…
In the op-ed piece, Zoellick painted his vision of the future global
exchange system. He doesn’t see the U.S. Dollar continuing as the sole
reserve currency. Instead, he sees a system where the dollar, euro,
pound, yen, and in time, the renminbi are all reserve currencies.
Then Zoellick focused on the fact investors are treating gold as an
alternative monetary asset.
He argued if investors see gold as a monetary asset, then gold should be
used as a “reference point” when setting global exchange rates. More
importantly, he urged major nations to use gold as an indicator of
public opinion about their monetary policies.
Zoellick tried to put the whole matter to rest on Wednesday.
When asked if he was advocating a return to the gold standard, Zoellick
replied, “I don’t believe you can return to a fixed exchange rate system
and that is the gold standard. I’m not advocating a return to the 19th
century when money supply was linked to gold.”
And for good reason…
He knows it would never fly. No major government has any desire to
return to a pure gold standard. When currency exchange is fixed,
governments are unable to influence their economies through currency
manipulation.
And governments definitely don’t want to give up their main weapons for
addressing economic instability.
So, if you’re counting on a return to the gold standard to drive gold
prices higher, you’re going to be sadly disappointed. However, there are
plenty of other reasons why gold prices are likely to keep rising. And
having gold in your portfolio still makes a lot of sense.
Just don’t expect central banks to adopt the gold standard and send gold
prices skyrocketing.
***Editor’s Note*** Remember a few months ago
when we were telling you to get into the energy sector? Well those
stocks have absolutely soared over the last 8 weeks as oil has hit a 25
month high.
So how have our recommendations done? Uranerz (URZ) is
up 142%, Puda Coal (PUDA) is up
76%, Cheniere (LNG) is up 62%,
and GMX Resources (GMXR) is up 30%. All within about 2 months!
The good news is… this is only the beginning of the bull market in
energy.
To get our next round of recommendations,
click here.
Our analysts have a new pick in the red-hot uranium sector that could
really take off in the next few weeks. To get it,
read this
free report…
• NuVasive (NUVA) was upgraded
by Boenning & Scattergood from Neutral to Outperform. The selloff after
management lowered revenue and earnings guidance has pushed the shares
into oversold territory. The analyst has a $30 price target.
• Barclays downgraded Dollar Tree (DLTR) to Equal
Weight. They say the shares are already pricing in a strong earnings
report coming next week. The analyst has a $53 price target.
• Robert W. Baird started coverage on Williams-Sonoma
(WSM) with an Outperform rating. They say the company is leveraged to
secular growth trends in e-commerce and can expand their margins. The
analyst set a price target of $42.
Print
Page
Bookmark Us
Home | Whitelist Us |
Terms of Use |
Privacy Policy |
Contact Us | Security |
Site Map