Central banks around the world are devaluing what they have created.
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New York, NY (PRWEB) November 20, 2012
In a recent Profit Confidential article, lead contributor and financial expert Michael Lombardi reports that the central bank of Brazil recently increased its gold bullion reserves for the first time since December 2008 by 1.7 tons, for a total of 35.3 tons. He adds that this central bank owns only about 0.5% of its reserves in gold bullion. (Source: World Gold Council, November 2012.) According to Lombardi, Brazil is just one of the central banks around the world that are realizing the potential of gold bullion and what it can do for their reserves—and they are scrambling to get more.
“…central banks around the world are devaluing what they have created,” says Lombardi. “These central banks need to back their currency with something other than a devaluing U.S. dollar.”
As Lombardi points out, central banks are realizing that gold bullion is a store of value and it can be used as a hedge against what Lombardi refers to as “money printing gone mad.”
“Even though [Brazil’s] purchase looks to be menial, keep in mind that the central bank of Brazil is pursuing a plan to devalue its currency in order to keep the exports flowing,” says Lombardi. “As the bank attempts to further devalue its currency, it will need to buy more gold bullion.”
In the article “More World Central Banks Turning to Gold Buying,” Lombardi reports that other central banks around the world are doing the same, with Hong Kong’s shipment of gold bullion to China increasing 23% in September to 69.7 tonnes. (Source: “PRECIOUS-Gold rises on short-covering, U.S. election eyed,” Reuters, November 5, 2012.)
While the Profit Confidential expert notes that the Chinese central bank will never say when and how much gold bullion it’s going to buy, he reasons that, considering its latest shipment from Hong Kong, China looks to be buying a lot of gold.
Lombardi concludes that the demand for gold bullion by central banks is present and it is expected that central banks will keep buying more gold bullion. He advises investors to look at any pullback in the price of gold bullion as a buying opportunity.
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.