The real world is driving gold bullion prices only higher.
August 29, 2011 – Once again the price of gold bullion started the day out with a precipitous drop of some $35 before starting its daily gyrations. And once again the stock market is coming on strong. This of course is to be expected, says the Wall Street Journal, “with favorable economic data helping investors mirror the positive tone in European markets.” Come again?
About the only encouraging news I have heard lately is that consumer spending was strongly up in July, and I take that with the proverbial grain of salt. Until I see several consecutive months of increased spending I’ll continue to chalk that up to back-to-school and long-postponed necessities. Until the housing market gets back on its feet I don’t see the rest of the economy going anywhere.
As for the positive tone in Europe, somebody’s not paying attention because that time bomb is ticking louder than ever. Any day now Germany could succumb to domestic pressure and pull the plug on future bailouts. The eurozone is far from stable and could implode at any moment.
Even more disquieting, however, is our government’s fiscal year is drawing to a close and so far there has been no sign of a budget for next year. Somehow I fail to see Congress rallying to the cause, putting aside their petty differences and putting together a budget we all can live with. Instead I see endless bickering as our country stumbles forward living hand to mouth on stopgap stipends and losing every last shred of credibility in the process.
So pardon me if I don’t get all excited about this week’s spate of economic indicators. And I don’t really care about the Fed’s next meeting in the third week of September. As Bob Dylan once penned, “you don’t need a weatherman to know which way the wind blows.”
All the numbers amount to are tiny historical snapshots, relatively useless compared to a wide- screen, real-time, pull-your-head-out-of-the-sand look about. You can make up all sorts of excuses for volatility but the real world is driving gold bullion prices only higher.
