Gold investment

The US markets are in a heap of deep trouble. Unemployment is soaring. Large financial and investment institutions such as Merlyn Lynch, Citigroup and etc has loss billions of dollars due to the sub prime housing mortgage loan mess and the oil price hike and declining US currency further aggravate the situation.

Keeping US currency is no longer a wise decision at least in the short and mid term since there is no telling how further down the dollar will slide. Wall Street, once the pride of the US economic power no longer controls the world market. Oil and cash rich countries such as Abu Dhabi, and Saudi Arabia to name a few have large stakes in some of the US largest financial institutions. Sovereign Wealth Fund better known as SWF of Singapore is one of the top four contributors has market capitalization amounts to trillions of dollars, and its impact on the US economy far surpass that of Wall Street.

US economic recovery is no-where in sight. President George Bush has finally acknowledged that the US economy is undergoing tough time. ‘Tough’ time is an understatement though since the economic situation facing America right now is different from the early 90s.

US debt to the World Bank amounts to trillions of dollars and couple with the need to pay pensions to the baby boomers, one wonders if the US has any magic formula to overcome this crisis. Furthermore, more and more countries are catching up with the US in terms of economic strength. China and India alone are schedule to overtake the US and Japan as the leading economic power by year 2015, that is of course if the US economy continues to falter.

The world has lost faith in the US currency; so much so that Venezuela has sign some oil contracts in Euros in the face of plummeting dollar. China may stand to potentially loss billions of dollars if its huge cash rich surpluses, notably in the form of US treasury and bonds value drop in the face of declining of US dollars. Gold prices have increased multiple folds the past several months. There are rumor that China may look to gold to offset and reduce risk of further declining US dollars impacting its reserves.
Is now a good time to look to gold? The answer is probably yes and most gold related ETF stands to gain from China sought to move its US dollar denominated reserves, from bonds and treasuries to gold and other raw materials.
So for those who has money to invest, its worthwhile to consider gold as an investment.
In the face of current market situation, one can’t go wrong with gold.