But if you look into the actions by central banks over the past decade or so, you can certainly figure out why gold bullion prices have risen.
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New York, NY (PRWEB) November 02, 2012
In a recent Profit Confidential article, lead contributor and financial expert Michael Lombardi reports that from January 2000 to September 2012, the amount of U.S. money in circulation (the “M1 money supply”) has increased 112%, or $1.3 trillion, due to the Federal Reserve’s money printing. (Source: Federal Reserve, last accessed October 11, 2012.) He adds that, bringing in money supply numbers from other central banks around the world, the supply of world fiat currency (paper money) has ballooned. According to Lombardi, this proves that the massive rise in gold bullion prices since 2000 is justified and the rise in the metal’s price will continue
“Since the year 2000, when it was trading around $300.00 [an ounce], gold bullion has increased in price more than 490%,” reports Lombardi. “In the same period [the] Dow Jones Industrial Average has risen a mere 15%.”
The Profit Confidential expert notes that understanding and predicting gold bullion prices can be difficult because, unlike a public company or a stock market index like the Dow Jones Industrial Average with earnings that are eventually paid out to investors in the form of dividends; gold doesn’t have a price/earnings ratio or dividend yield.
“But if you look into the actions by central banks over the past decade or so, you can certainly figure out why gold bullion prices have risen,” says Lombardi.
Lombardi believes that when the gold standard was abandoned, central banks sold their gold and flooded the world’s market with their currencies, something that was not possible when the gold standard was in place.
In the article “Why I Expect the Price of Gold Bullion to Continue Rising for Years to Come,” Lombardi points out that just by looking at the Federal Reserve’s actions, one can get a general idea about the actions of central banks around the world and how they’re impacting the price of gold.
Lombardi concludes by simply stating that as the money supply around the world has increased, gold bullion prices have increased. Expecting more fiat currency printing in the years ahead, Lombardi states that this means the price of gold bullion will continue to increase.
Profit Confidential, which has been published for over a decade now, has been widely recognized as predicting five major economic events over the past 10 years. In 2002, Profit Confidential started advising its readers to buy gold-related investments when gold traded under $300 an ounce. In 2006, it “begged” its readers to get out of the housing market...before it plunged.
Profit Confidential was among the first (back in late 2006) to predict that the U.S. economy would be in a recession by late 2007. The daily e-letter correctly predicted the crash in the stock market of 2008 and early 2009. And Profit Confidential turned bullish on stocks in March of 2009 and rode the bear market rally from a Dow Jones Industrial Average of 6,440 on March 9, 2009, to 12,876 on May 2, 2011, a gain of 99%.
To see the full article and to learn more about Profit Confidential, visit http://www.profitconfidential.com.
Profit Confidential is Lombardi Publishing Corporation’s free daily investment e-letter. Written by financial gurus with over 100 years of combined investing experience, Profit Confidential analyzes and comments on the actions of the stock market, precious metals, interest rates, real estate, and the economy. Lombardi Publishing Corporation, founded in 1986, now with over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more on Lombardi, and to get the popular Profit Confidential e-letter sent to you daily, visit http://www.profitconfidential.com.
Michael Lombardi, MBA, the lead Profit Confidential editorial contributor, has just released his most recent update of Critical Warning Number Six, a breakthrough video with Lombardi’s current predictions for the U.S. economy, stock market, U.S. dollar, euro, interest rates and inflation. To see the video, visit http://www.profitconfidential.com/critical-warning-number-six.