... seem to be infesting their central bank. Dig this
Nov. 3 (Bloomberg) -- Gold jumped to a record after India’s central bank bought 200 metric tons of the metal from the International Monetary Fund, heightening speculation that there may be more official purchases.
So how much is 200 metric tons? Well, they held 350 metric tons before, so this is a 57% increase in their gold holdings in one day. Why did they do this?
Central banks, the biggest holders of gold, may diversify out of the dollar and buy bullion as ballooning U.S. debt and low interest rates weaken the currency.
“It is but a matter of time until China and the IMF announce much of the same,” said Dennis Gartman, an economist and the editor of the Gartman Letter in Suffolk, Virginia.
If that's still a bit obscure to follow, allow me to show the reason gold is shooting up and the dollar is tanking with a simple chart.Hope and change!
Owning a little gold in one's portfolio isn't a bad thing, IMHO.
I've always been kind of ambivalent about gold. On the one hand, it seems like such a tremendous waste of effort to go through all the mining, processing, and refining to make something that will just get locked away in boxes for most of the rest of eternity. And of all the mining industries, the gold industry is probably the one that is most rife with fraud, deceit, and (sometimes) murder.
On the other hand, when the economy goes south and other mining operations take it on the chin, the gold minining industry generally gets a big boost. So, they can still hire most of my students when the iron, copper, and base metals industries are shutting down.
Well, on balance, I suppose making money by feeding the frenzy of a bunch of gold-bugs is better than supporting oneself with the other traditional pillars of the US economy - tobacco and whiskey.
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