Gold And The World Wide Crisis

To global economy analysts the year 2011 translates in the story of several Quantitative Easing episodes. Quantitative Easing is a method employed by central banks to avoid financial crisis, by printing money and buying up government bonds. The interest rates on government bonds should lower. This in its turn should lower mortgages and borrowing costs for individuals and businesses.

The current issues threatening with a currency crisis were triggered by tensions between stronger and weaker economies in the Eurozone. Right now, stronger Eurozone economies are offering loans to the weaker ones, in an on-going attempt to stabilize the situation. Financial austerity was imposed on states at the same time. And the International Monetary Fund has once again become a preeminent actor in this context.

The European Central Bank has repeatedly resorted to typing extra money, to cover for the debt issues of weaker European economies. But the mechanism has failed to show positive results up to now and some doubt it would. The Federal Reserve, in its turn, has typed extra dollars to cover for some of the American debt. Worries are that instead of efficient help, these measures will wind up triggering hyperinflation worldwide.

An accurate reflection of the growing distrust in currency is the growing price of gold. The last time when gold price fell in the last decade was 2008. But gold price lowered less than the price of any other asset did at that moment. And it has fast resumed its increase after that. Despite the rather mild downwards correction that occurred in September this year, we are in bull market phase for gold since February 2001. Against the background of disruptions in the functioning of currency, gold price has risen a staggering 170% from 2008 to now. Analysts believe that a certain amount of variation would occur, but bull market for gold would go on for a while.

Under these circumstances, investing in gold has become a priority for many, from professional investors to ordinary people who feel like they need an alternative financial insurance to protect themselves from the variations of currency values and from inflation. Strategies that target accumulation, from buying physical gold, to investing in EFT’s and in gold hedge funds, suit best this growing phase of the market. Investors interested in long term and relatively risk free investments should particularly prefer gold funds, where all investment strategies are aimed at securing positive returns that are not directly connected to an overall market performance.

By: JacquelineBrewster

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The Hinde Capital gold funds offer investors the opportunity to seek the preservation of capital in gold, against the potential erosion of the purchasing power of fiat paper money.