The news of the U.S. mint running out of one-tenth ounce Gold American Eagles has led some to believe that there is panic buying in the gold market, as demand for physical gold bullion has been surging relentlessly since the recent decline in prices. But looking at the fundamentals of the economy, this surge in gold buying is far from a panic. It is the rational response you would expect from a minority of people who understand the true fundamentals of the economy.
If anything the sell-off in gold was a panic liquidation in a very gold-friendly environment. The minority of people who actually see through all the hype from the mainstream financial media – who say everything is sunshine and rainbows with the economy – are taking advantage of the price correction just as they should.
The Fed and other central banks are creating the most bullish environment for gold one could possibly imagine. The government’s totally rigged Consumer Price Index may say there is little inflation but those who are not completely delusional can see the truth – prices have been rising significantly since 2007 from the massive monetary stimulus of the Federal Reserve.
There will be a panic into gold eventually when mass inflation sets in. By that time it may be too late for many of the public to buy gold as a hedge against inflation. The smart folks are buying gold now while it’s relatively cheap. But its always a small minority of people who do the right thing and stay ahead of the crowd.
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