In 2009, the U.S. media were finally forced to start comparing the current, U.S. economic collapse with the “Great Depression” of the 1930’s, simply because there were no other historical precedents remotely comparable to the current meltdown.
A recent question from regular reader “Johnny O” asked me how the gold market had performed during the U.S.’s first “Great Depression”, in order to (hopefully) gain some insights into how the gold sector would perform this time around.
After professing that I was far from an expert concerning that period of time, I suggested to him that the 1930’s made a poor comparison – since current parameters were so much more bullish for the precious metals sector than during the “Dirty Thirties”.
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It’s wildly fashionable among investment circles to bash the US Dollar’s prospects. Profligate US Government spending, our Federal Reserve’s easy money policies, and the soaring gold price are heralded as proof of the Dollar’s weak outlook. Investors are concerned that a weak Dollar will result in inflation, more expensive imports, capital leaving our shores and depreciation of Dollar denominated assets. While there are few things all investors can agree upon, many see the Dollar headed for ruin.
When Nouriel Roubini talks, the world listens. Roubini is, of course, the once-obscure New York University economist whose dire warnings about a financial crisis proved depressingly prophetic. Last week, Roubini was shouting. Writing in the Financial Times, he warned that the Federal Reserve and other government central banks are fueling a massive new asset “bubble” that — while not in imminent danger of bursting — will someday do so with calamitous consequences.