Making Money In Forex Trading – Learn The Truth

Posted by admin as Euro Dollars

The very word trading involves making money. Otherwise it would have been written as Barter Trade!

Forex trading certainly involves making money. Otherwise, who would want to enter into it? For charity? Forget it. Leave the charity part of forex trading to the World Bank or the IMF, which helps countries. And they too charge a fee, plus a whole host of conditions. So they are also trading!

Forex trading is putting the surplus currencies available with banks, financial institutions, and other authorised brokers, in the forex market, which functions throught the day and night through the year without any break. The surplus currency is marked up for say an x per cent which another bank, or institution in a different country needs to meet its foreign currency needs, and if the offer made suits that country’s institution, it would buy that currency for a negotiated price. That way money, which is what foreign exchange is all about, is made to work, and earn, and earn. The opposite is also true. Let’s assume that your bank is short of Japanese Yen which it needs to make up for a commitment tomorrow. It tries to buy at as low a price as possible, and offers dollars or Euros in exchange. The diference in the mark up of the currencies would help your bank reduce the cost of buying the Japanese Yen. This is known as arbitrage.

The difference in the buying and selling price is the profit earned. And it can be substantial. You are not dealing with millions here. You are dealing with trillions and trillions of currencies, of which nearly two trillion is the US Dollar.

Currencies are denoted by short names, as for stocks on the NYSE or the NASDAQ. It makes it easier for trades. USD stands for US Dollar CAD stands for the Canadian, AUS stands for the australian Dollar, JPY for Japanese Yen, EUR for the Euro, FF for French Francs, GBP for British Sterling Pounds, etc.

You can get into this market in three ways. The best choice of course is to use your bank to help you trade. They may have some minimum amounts involved. The second is to choose an investment institution or banker, which offer a investment plan which trades in currencies and stocks in a particular proportion. The third is yourself. In the last one, you need to check whether you are authorised or not under the law of your country.

Even if you are authorised by the laws of your country, it is advisable to use the first two options, while you should go on a spree of reading up about what makes currencies fluctuate from day to day. For example, you might find that today the Euro is traded against the Dollar for 1.25, and the next day it has moved to 1.26. What difference does that change from the second deciman digit 5 to 6 mean? What drives these changes, on what principles does currencies take short or long term positions, much as you take positions in the stock market? In stocks, you read the balance sheets, the quarterly reports, and the analyst reports on the industry, the country, and make your decision.

You have to do likewise for the currencies market. It’s fairly easy. Get a Grad book on Finances and you are sure to get one that explains it to you. Start with the basics. Learn the language, the mechanism, the system, the gaps, and then move to the higher level of education. Since it is a new area for you, you have to EDUCATE yourself.

Forget the scamsters offering you trades for $1. it does not even cover the cost of a sending out an email, so how come you are getting ‘thousands’? Stay away, and be safe.

Abhishek Agarwal
http://www.articlesbase.com/investing-articles/making-money-in-forex-trading-learn-the-truth-703530.html

Today… Gold is Gold

Posted by admin as Euro Dollars

We all have heard the saying “Old is Gold” and in the recent past when there was boom in every sector it did appear that “Gold” has become “Old”, and there was no point in going for something that old. We had so many sectors to look at where the returns we just fab. Buy today hold for a few weeks and sell it you make a good 15%-20% margin on that. What more do we wanted. I know friends who have made some killing returns on real estate and commodities like this. But…., no body thought in the wildest of their dreams that all that boom period is short lived and there will be a burst.

“Boom” went the economies and now nothing gives any return. Oil which was around $150 is $45. So is copper, corn and what ever you name. Value of currencies is the same. I am not talking about the Zimbabwean Dollar…., I read somewhere that they are introducing a Zimbabwean Dollar Trillion note. Sorry to say but the guys there (authorities) look crazy to me, what are they trying to prove, a Trillion Zimbabwean Dollar note. I have a 100 Billion one which I bought as collection item and that itself looks quite stupid.

Any way, we were talking about the stable currencies, the likes of USD, EUR and GBP. Look at our dear British pound which was 1£= $1.89 and is about 1£ = $1.30 today. Against the Euro it is one-to-one. Reports are saying that the pound might go one-to-one with the dollar.

I live in UK and what does this mean to me. I have to confess here that I am no financial / economic expert but my plain and simple mind says that British economy is heavily dependent on imports, almost all the things which we have are imported from various countries and I am sure that the majority of payments are made in USDs. What would that mean if the pound goes one-to-one to the USD. I think it means super duper expensive products, the veggies, the meat almost everything. It really make me nervous to think that the import costs will be so high if the pound becomes equal to the US dollar.

Now…, I have been reading a lot of articles form various experts about what to do in this time of crises and how to save the money. The devaluation of pound is so rapid that very soon all the fun of going to New York for shopping will be gone (if it has not already) and shopping in UK itself will be tough. Various experts have been suggesting various ways to save money. I have also done my calculations and have the following in mind. The oldest method which has been adopted for centuries by humans to fight inflation has been Gold. People have always found that no matter what comes, Gold always remain the most precious of all and in the time of crises people look at gold as a saviour. I have calculated gold with the sliding pound is mind and have the following…..today the Pound is $1.30 which means that for every pound I get £1.30. Now if I buy gold which is $900 per Troy Ounce I will be spending £692 (900/1.30). Now, lets presume that the pound and US dollar have become equal. What would that mean to Gold which is $900, won’t it be £900 also since a pound will buy an equal amount of dollars.

This in fact means that the value of my Gold becomes to what it will be in Dollars. Supposing the Gold price is still $900. Since pound and dollar are equal wont the Gold price be £900. If this is true what does it mean….the Gold which I bought for £692 will be worth £900 although in the international market the value of the pound has diminished but locally I will be getting more pounds, isn’t it? Even if the Gold prices remain stationary which is highly unlikely to happen, just the sliding pound will give me a good return.

Analysts are saying that the Gold should be touching the four figure per Troy Ounce mark very soon. No wonder there is such a heavy rush in the shops that sell Gold coins, try getting one and you will see what I mean. I have been in touch with a few friends who have bought or are trying to buy gold coins and I am amazed to learn that they just can’t find any. Apparently there is a premium on some !

Therefore friends its time to get a bit worried about the pound and start thinking about where to invest so that we don’t reach a negative equity status. I think in the current scenario we can easily say that “Gold is Gold”, lets get some as an investment.

Hey, by the way, Valentine Day’s around, why not buying a Gold Coin for your loved one. You know we women just love Gold anyway !

Emma
http://www.articlesbase.com/business-ideas-articles/today-gold-is-gold-740563.html

Commemorative Coins – What Every Collector Longs For

Posted by admin as Euro Dollars

Commemorative Coins As Souvenirs

The popularity of commemorative coins has risen. Often they are given as gifts for special occasions and are kept for many years as souvenirs from a dear friend or loved one.

There is a great demand for commemorative coins among collectors as it signifies a mint date or an important event.

From the 1970’s there were individual commemorative coins in the market each year, but now they come in packages as sets. This type of marketing is largely because of the introduction of the euro and the depreciation of the coins which started in 1971.

Some countries have used commemorative coins for propaganda and Royalty has issued coins to mark special events or occasions.

The Different Commemorative Coins Produced

In 1892 the Columbian Exposition was remembered by the production of the half dollar. This was to celebrate the 400th anniversary of Christopher Columbus’ discovery of the New World.

The next year the quarter dollar came into existence – this honored the Spanish Queen Isabella who championed Women’s Rights.

In the 1900’s the early coins in silver were introduced – these coins were in honor of George Washington and Lafayette – the next year the half dollar came out and there were legal tender coins to celebrate historical events from 1892-1954.

The Washington Quarter dollar came out in 1932 – this was in honor of George Washington’s 200th birth anniversary and is an extremely well known commemorative coin and enjoys a wide circulation.

Commemorative coins from 1892-1954 were not circulated as the United States had not legalized it for the public so collectors do not pay high costs for these coins.

The Bicentennial quarter came into existence in 1975. This commemorative coin was the second one to be circulated and the half and silver dollars (1776-1976) were issued again and these were considered a special edition for collectors.

Each collector has his own individual taste in coins. Most of the collectors prefer the modern coins, but there are those who like the coins from 1892-1954. The modern coins have different monetary values according to the series.

There have been many series that have come out and there was a suggestion to Congress to release the Lincoln cent to commemorate his birth anniversary. But it is not known whether a commemorative coin of 1 cent will ever be released.

There seems to be a strange pattern in the circulation of commemorative coins. The silver and half dollar coins from 1776-1976 are not really popular with collectors because they are scarce. The coins that are most in circulation are the quarter dollars. It would be indeed something of a speculation if the proposal to circulate the commemorative coin of one cent denomination will eventually come into being.

What Are Commemorative Coins – Commemorative Coins Hold A Meaning

Abhishek Agarwal
http://www.articlesbase.com/collecting-articles/commemorative-coins-what-every-collector-longs-for-739712.html

Earn Money on Forex

Posted by admin as Euro Dollars

The secret to earn money on Forex is easier to discover than you think. FOREX trading has become very popular with financial investors, especially small individual investors using their home computers. Anyone can earn money on Forex with the right knowledge and approach.

There are several reasons why the Forex market has become highly popular with small time investors. These are

1.      High liquidity

2.      Availability of leverage (usually 100:1)

3.      Lower dealing costs

4.      Small investments allowed – you don’t have to invest millions.

Like all markets, FOREX is a place to trade goods, only in this case the good traded is currency and you make money simply by buying a currency and selling it for a profit. You buy one currency with another, wait for the exchange rate to change between the two currencies and then sell. Hopefully the exchange rate has changed in your favour and you make a profit.

First of all you should realise that FOREX trading is essentially gambling, and the high leverage (100:1) means that you can quickly lose your investment. Having said that, that is all you can lose, while on the other side, the profits can be unlimited.

Many people find FOREX trading thrilling, and the risks can be minimised by, as a FOREX trader, ensuring you are familiar and fully understand the consequences and potential pitfalls of Forex trading along with the positive opportunities that Forex trading can bring.

So, fancy having a go at Forex market trading?

The Forex market operates 24 hours a day. Anyone can access it via the Internet and your investment can be a few dollars at a time. It is a market worth over 2.5 trillion dollars a day – 100 times bigger then the NASDAQ!

Where do you start?

1.                  Open a Forex account with an online broker– fill out an online application, sign the margin agreement. This allows the broker to get involved in your trading at anytime – it will be his money that be used to enable the trading process.

2.                  Find a trading approach that suits you. Have a good look at the currency markets.

3.                  Remember it is trends that are important. Fluctuations are inevitable, but if things start going the wrong way, they could just as easily reverse. Make trends your friends!

4.                  Make sure you have a good understanding of the major currencies – USD, Euro, UK Pound and Swiss Franc. Understanding these currencies and how they interact is essential if you want to trade on Forex.

5.                  Keep a good eye on your trading charts – so that you are completely aware of how the market is moving. Very quickly you will start to understand daily trends between currencies and have increased opportunities to trade profitably.

If you are interested in trying out with Forex trading, you should be determined and prepared for some minor setbacks. Don’t be a gambler and try to recover losses only to lose more! Prepare yourself with all of the most essential and sensible knowledge related to Forex trading. There is plenty available!

For the secret to successful trading on Forex visit www.forex-wizard.info

Craig Summer
http://www.articlesbase.com/currency-trading-articles/earn-money-on-forex-715846.html

Forex Trading You Can Start Here

Posted by admin as Euro Dollars

Although most people outside of the financial world consider the New York Stock exchange to be the pinnacle of financial trading, it is the Foreign Exchange Market that is the true leader. The Forex Market, as this currency exchange is known, has a volume of around 1.5 trillion United States dollars daily. This staggering amount is over one hundred times larger than the volume of the NYSE.

The market is world wide. It is what is known as an “interbank” market where trades are conducted OTC (over the counter), which means they take place directly between the parties involved in the trade rather than through a central exchange. The main centers for the Forex market are located in Sydney, New York, Tokyo, Frankfurt and London. This allows the market to operate virtually 24 hours a day.
Put simply, the Forex market is based on trading the currency of one country for the currency of another country. The ratio of the value of one currency to the other rises and falls, and this ratio is what fuels the market. The trades consist of the simultaneous buying of one currency, for example, United States Dollars (USD), and the selling of another, i.e. The European Euro (EUR).

The most important market in Forex trading is called the “spot market” because trades are executed at once, or “on the spot”. There are other elements of Forex trading, such as futures trading, and Forward Outrights, which are slightly more complex than spot trading.

Richard Porter
http://www.articlesbase.com/currency-trading-articles/forex-trading-you-can-start-here-718612.html

Making Money on Forex

Posted by admin as Euro Dollars

The key to making money on Forex is fairly simple. Buy low – sell high!

Uh! OK – so why can’t everybody do it. Well, unfortunately, for somebody to make money – someone else has to lose it. Oh, and don’t forget the brokers get a cut of every transaction Just like a casino always wins on zero on the roulette wheel.

So what are the main factors to successful trading and therefore making money on Forex?

First – understand what Forex is about. Forex is the foreign exchange currency marketplace. Trading on Forex goes on 24 hours a day and is worth 2.5 trillion dollars a day. That is a very big pie and everyone, with the Internet can have a small slice.

Second – make sure you understand the main currencies – the yen, US dollar, UK pound, Swiss franc and Euro.

Third – the trend is your friend. You will essentially be predicting the relationship between two different currencies. Whether the cost of one will grow or fall against the other. But remember that during a trading period it is normal for the relationship to change – only to reverse again back to your forecast tren.

Fourth – keep an eye on what is going on – but don’t be tempted to micromange your investment and miss out on the larger pay day.

So, why is Forex such a popular trading market?

1. You do not have to be a millionaire to trade on Forex. You just have to be able to sign up with an online broker and you can trade using just 10’s or 100’s of dollars.
2. You get high leverage on your investment – around 100 times your investment. This means that if you invest $50 you trade with $5000 and take the profit from a $5000 investment.
3. The dealing costs are lower on Forex than with other markets.
4. The Forex marketplace is highly liquid.

One increasingly popular way to trade successfully on Forex is to use a Forex robot. Essentially software that can help you to trade successfully. Do not think of this as cheating. The big guys are using them all the time – all you are doing is having the same advantage as them.

Face it, your computer can do a lot of things that you can’t. It can accomplish complex mathematical computations in a blink of an eye. And a software program specifically designed to help you analyse and profit from the Forex market is going to be a big help.

The most important benefit of using a Forex robot is that the robot does not have to deal with human emotion. It is not going to have a panic attack and then make a wrong decision just because things stop going in the right direction for a small period. A human may react by stopping trading and taking a loss only to then see that a big profit was just around the corner.

Like anything else – you need to invest wisely and make sure you understand fully what is going on. Make sure you invest in a program that has clear and easy to follow instructions and guides.

For the secret to successful trading on Forex visit www.forex-wizard.info

Craig Summer
http://www.articlesbase.com/currency-trading-articles/making-money-on-forex-715852.html

Commemorative Coins – What Every Collector Longs For

Posted by admin as Euro Dollars

Commemorative Coins As Souvenirs

The popularity of commemorative coins has risen. Often they are given as gifts for special occasions and are kept for many years as souvenirs from a dear friend or loved one.

There is a great demand for commemorative coins among collectors as it signifies a mint date or an important event.

From the 1970’s there were individual commemorative coins in the market each year, but now they come in packages as sets. This type of marketing is largely because of the introduction of the euro and the depreciation of the coins which started in 1971.

Some countries have used commemorative coins for propaganda and Royalty has issued coins to mark special events or occasions.

The Different Commemorative Coins Produced

In 1892 the Columbian Exposition was remembered by the production of the half dollar. This was to celebrate the 400th anniversary of Christopher Columbus’ discovery of the New World.

The next year the quarter dollar came into existence – this honored the Spanish Queen Isabella who championed Women’s Rights.

In the 1900’s the early coins in silver were introduced – these coins were in honor of George Washington and Lafayette – the next year the half dollar came out and there were legal tender coins to celebrate historical events from 1892-1954.

The Washington Quarter dollar came out in 1932 – this was in honor of George Washington’s 200th birth anniversary and is an extremely well known commemorative coin and enjoys a wide circulation.

Commemorative coins from 1892-1954 were not circulated as the United States had not legalized it for the public so collectors do not pay high costs for these coins.

The Bicentennial quarter came into existence in 1975. This commemorative coin was the second one to be circulated and the half and silver dollars (1776-1976) were issued again and these were considered a special edition for collectors.

Each collector has his own individual taste in coins. Most of the collectors prefer the modern coins, but there are those who like the coins from 1892-1954. The modern coins have different monetary values according to the series.

There have been many series that have come out and there was a suggestion to Congress to release the Lincoln cent to commemorate his birth anniversary. But it is not known whether a commemorative coin of 1 cent will ever be released.

There seems to be a strange pattern in the circulation of commemorative coins. The silver and half dollar coins from 1776-1976 are not really popular with collectors because they are scarce. The coins that are most in circulation are the quarter dollars. It would be indeed something of a speculation if the proposal to circulate the commemorative coin of one cent denomination will eventually come into being.

What Are Commemorative Coins – Commemorative Coins Hold A Meaning

Abhishek Agarwal
http://www.articlesbase.com/collecting-articles/commemorative-coins-what-every-collector-longs-for-739712.html

Forex Pips Explained

Posted by admin as Euro Dollars

Forex pips explained describes what forex pips are all about. If you are looking at the forex markets as a potential way of generating extra income, then you will probably have come across this term. I could make a joke about apples or oranges, but everybody’s already done those! You will need to understand what pips are if you are thinking about becoming a home trader on forex.

You will not believe how simple it is to understand what a pip is. PIP stands for Percentage In Point. It is the smallest price increment in Forex Trading. For the US dollar one pip is equivalent to the fourth decimal point, or 0.0001 of a dollar (or 1/100th of a cent.) So, for example the US Dollar / Euro bid is 1.3400 and was offered at 1.3395 the spread difference is 5 pips. Simple enough?

However this four decimal point rule does not apply in all currency markets. For example, for the Japanese Yen a pip is equivalent to the second decimal point, or 0.01 Yen.

Why do currency markets trade in pips, simple, when the major forex traders such as banks, trade in hundreds of millions of dollars, each 0.0001 of a dollar is worth thousand of dollars.

And even for the smaller home investor, you have to remember that you are likely to be trading with a leverage factor of 100 to 1. For a hundred dollars invested, you will actually be trading $10,000, so for you, in these circumstances, a pip is worth a dollar.

One of the things you will have to think about when starting to trade on forex is a choice of online broker. When you start trading, the guidance is that you invest small amounts until you develop and understand your trading style. From the point of view of the online broker, these small investments represent a very small return on their investment of maintaining websites, help lines and providing free online training.

It is therefore not too surprising that they would expect you to close your deals for a greater spread difference in pips than if you were trading 10’s of thousands of dollars. It is just the same as buying sugar – buying a 100lb sack is going to be cheaper, per pound, than buying a 2-pound bag.

Craig Summer
http://www.articlesbase.com/currency-trading-articles/forex-pips-explained-728773.html

Top Ten Basic Terms in Forex Trading and Their Definitions

Posted by admin as Euro Dollars

Forex refers to the foreign currency exchange market, the world’s largest financial trading market. Some terms that help a person understand Forex trading include:

· Bid – to buy

· Ask – to sell

· Liquidity – financial ease of transaction, i.e. cash

· Trading volume – the amount traded

· Bid/ask spread – the difference between the proposed buying price and the actual selling price

· OTC – over the counter

· Exchange rate – the difference between currency values; for instance, a Canadian dollar is valued at .86 of a US dollar

· Hedge funds – large mutual funds companies that control vast amounts of money and are able to manipulate the value of a currency through speculation

· Central bank – the national bank of a nation, which usually exerts control over the value of that currency

Forex trading is in essence the investment in the currency of one country. Large international corporations that do business in many nations find value in keeping their cash reserves in a variety of nations, and holding their funds in a variety of ways. For example, a US company may have a percentage of its working capital in US dollars, but if it does quite a bit of business in Europe may also find it beneficial to keep a percentage of its money in Euros, in European banks. Many individual investors over the years have discovered that there is profit to be made in investment and speculation in the currency or forex markets.

As an example, during the 1970’s the German deutchmark was changing rapidly in value. It was worth anywhere from 1.7 marks to the US dollar to 2.5 US marks to the dollar. When the mark was worth 2.5 it was beneficial to spend dollars buying marks, since the mark would buy more goods or services at that rate. When the mark was only worth 1.7 to the dollar there was less incentive.

The forex market itself is not unified. There are many small forex markets specializing in trading various currencies. The most commonly traded currencies in forex trading are the US dollar, the Australian dollar, the British pound sterling, the Japanese yen, and the European Euro. The values of these currencies will vary depending on the market in which an investor is looking, so there is really no such thing as a single, unified dollar rate, but instead there are several dollar rates, which are different according to the market where the trade is occurring. The major cities in which trades occur are London, New York and Tokyo. This covers a 24 hour clock. When Asian trading ends, European trading beings, and when European trading ends, then American trading opens. Of course when American trading ends, it is time for Asian trading to open again, and so on.

The most commonly traded currency is the US dollar, involved in 89% of all trades. This is followed by the Euro involved in 37% of all trades, then by the yen in 20% and the pound in 17%. The fastest rising currency in trade is the Euro, but the US dollar is still widely considered the anchor point, and the currency to watch to judge how others will react. Differences in value of currencies come form the daily news. Changes n gross domestic product growth, in inflation, interest rates, budget and tirade deficits, surpluses and other economic conditions will cause changes in currency values. Investors and traders for this reason follow the news very closely. In fact, there are 24 hour cable news channels and many web sites devoted to news of value to currency traders.

It wasn’t long ago that the nation of Iran removed its currency from European investment banks. In anticipation of rising world tensions they removed their currency to become less vulnerable to freezing of their assets and to economic warfare, of which forex trading could be a part. The forex market is very susceptible to rumors. In fact the central banks of some countries have at times manipulated the value of their currency by spreading rumors about hikes in interest rates and other economic news that could have an impact on the value of the currency. When this news is false it is called a dirty float.

Jim Davy
http://www.articlesbase.com/currency-trading-articles/top-ten-basic-terms-in-forex-trading-and-their-definitions-740780.html

Gold Bugs Have Fed to Thank for Recent Rally

Posted by admin as Euro Dollars

By Don Miller
Contributing Writer
Money Morning

The currency markets reaction to the Federal Reserve’s recent interest rate cuts has ignited a rally in gold, as investors weigh the benefits of owning the yellow metal versus U.S. Treasuries and the dollar.

As a result, gold has started to shine again as a stable source of value at a time when the dollar and other commodities – like oil and copper – have fallen hard. The spot price of gold has climbed above $870 an ounce on the New York Mercantile Exchange, up about 20% from its October lows.

Gold has been on roller coaster ride in 2008, moving from its all time high of $1035 in March, to as low as $681 an ounce. Some of that decline occurred during the recent stock market plunge. Many investors were forced to liquidate profitable gold positions in order to raise money to cover their paper losses.

Its decline was then accelerated by the recent onslaught of financial bailouts, as many investors held a preference for liquidity and safety in the form of cash holdings guaranteed by the U.S. government.  That was reflected in the skyrocketing prices of government bonds and investments in government-backed banks, which also lowered yields.
But with the Fed’s recent decision to cut its target interest rate to a range of 0% to 0.25%, the dollar has suffered a significant decline. Suddenly, foreign investors who were scooping up dollars have cut back on their flight to safety, knocking the dollar index (NYBOT: DX) down 10% in the last month.  The index reflects the dollar’s value against the Euro, Japanese Yen, British Pound, Canadian Dollar, Swedish Krona, and Swiss Franc.

The Fed’s interest rate cut may also have given gold a comparative boost in the eyes of investors. Gold, which never pays interest, suddenly doesn’t look so bad when compared to T-bills, which also are paying zero interest lately.

Volatility has risen this year compared to previous years, and the last few months have been the most volatile of all – an indication of investor ambivalence. But any uncertainty about the increasing price of gold may have been waylaid by the Fed’s recent rate cut and its dampening effect on the dollar and Treasuries.

Consequently, don’t expect this rally to be short-lived. As we pointed out in our 2009 Outlook Report on Gold, the fundamentals in the market hold the promise of more gains ahead.

It appears unlikely central bankers around the world will stop stimulating economies, printing money and doing whatever it takes until growth and confidence are restored – even if the cost is rampant inflation.

Consider these wild card inflation indicators that Money Morning Contributing Editor Martin Hutchinson believes will carry gold prices to $1,500 an ounce by the end of 2009:

• Over $7 trillion of freshly minted U.S. dollars are now in circulation with the aim of saving the global financial system.
• The incoming Obama administration has promised another $1 trillion or so stimulus package is on the way.
• It’s likely the Fed’s interest rate cuts will soon be followed by central banks around the world.

These economic stimuli are designed to do one thing – get the consumer spending again.

The bailout of the banks was the first step, but the banks are still keeping a tight rein on credit. Now the government is trying to get easily available, cheap money back into the hands of the consumer by running the printing presses around the clock.

“The government is pumping money in so many banks, and that money has to come out somewhere,” said Hutchinson.

Some of that money will “come out” into the economy in the form of higher stock prices. That will make consumers wealthier, and could give them more confidence in the economy. More confidence means more spending. As that happens, prices for goods should begin ticking upward, giving another booster shot to gold prices.

For instance some of that money is already going into gold bars and coins. In fact, the U.S. Mint was forced to suspend sales of the popular American Eagle and Buffalo gold coins for extended periods twice in the last year. The mint was unable to secure enough gold blanks from suppliers to match demand.

“I’ve never seen a case where demand was so high and supply was so short,” Chicago coin dealer Harlan Berk told the Associated Press.

With massive amounts of capital floating around, the time it takes to re-inflate the global economy will be far shorter than most analysts expect. Governments fear deflation more than anything.  It appears they will only fight inflation when they are assured they have won the first battle, which is growth at any cost.

When inflation kicks in, the dollar’s buying power will suffer long-term.  In fact, we expect a decline in all the world’s paper money, over time.  Historically, investors in gold have prospered during periods of weakening fiat currencies.

That leaves gold as a bright light in the investment world, making it an odds-on favorite to open a new leg of a long-term uptrend.

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Money Morning
http://www.articlesbase.com/investing-articles/gold-bugs-have-fed-to-thank-for-recent-rally-705193.html