Gold Prices Exploding

Gold Prices Resting...but not for long.

Gold prices were over $1030 as inflation fears heated up in March of 08. One of the best barometers to tell how much money (read credit) is being created by government is by watching gold. Gold at $1000 is the highest it's been ever.

As gold topped $1000, the news became front-page across the country, and radio and TV financial programs led off talking about the price of gold.

Further, few reports dared suggest that the price of gold could climb still higher. Gold stands a good chance of seeing higher prices before the inevitable price correction, which always follows such a strong move.

Most reports saw golds high price as a novelty, not the ominous sign that something is drastically wrong with the state of financial

affairs in the United States. The truth: gold is responding to profligate spending in both the government and the public sectors. Further, gold is rising because of the massive inflation by the Federal Reserve under Alan Greenspan and the current Fed chariman. Let's take a brief glance at only one reason for gold's jump above $1000: federal spending.

The federal government now has more than 11.3 trillion in official (on the books) debt. Only five years ago, gross public debt stood at $6 trillion. For those calculating, that is a 91 percent debt increase in only five years. The United States took 226 years to run up a debt of $6 trillion. In five years, an additional $5 trillion was tacked on.

Unfunded U.S. government liabilities--Social Security, Medicare, Medicaid, military pensions, federal workers' pensions, and other promise such as picking up the tabs for bankrupt corporate pensions--will reach $90 trillion or more by the time Bush leaves office.

Pulling statistics from the respected Congressional Budget Office's January report on the federal budget and economy, Citizens for Tax Justice show annual deficits under Bush

policies skyrocketing to $1.164 trillion by 2015. Those numbers are even higher now. These projections are seven times the Bush administration's numbers because the White House assumes, among other things, that current tax cuts "sunset," that Iraq and Afghanistan expenditures will suddenly end, and that federal appropriations will "plummet" as a share of the economy.

The Congressional Budget Office forecasts that by 2013 "the government is likely to be spending more to pay interest on the debt than on all domestic appropriations put together." Any wonder the price of gold topped $1000? Think gold prices will go higher?

It appears unlikely that the problem of deficit spending will be addressed any time soon in Washington. Sadly, our lawmakers do not yet even see it as a problem. While it is true that Democrats never miss an opportunity to carp about Bush's refusal to "roll back" his tax break for "rich Americans," the Democrats would be as quiet as church mice if the deficit spending were for welfare programs. Either way, the results would be the same: continued deficit spending.

When gold prices move higher, so does the price of silver....precentage wise silver does it faster.

The way gold topped $1000 was a big deal because the price of gold is the thermometer for the health of a nation's currency. A rising price for gold suggests a fever is building. However, the reporting suggests that few reporters understand the United States is infected with a deadly virus, not a common cold.

About the author:Bill Haynes heads CMI Gold & Silver Inc, one of America's oldest precious metals dealers. See CMIGS' website at http://www.cmi-gold-silver.com/. This article may be reprinted provided this signature remains intact, including the direct link to CMI Gold & Silver Inc., Written by: Bill Haynes

When gold prices move higher its a good idea to learn when to buy and sell gold to maximise your gold profits. Use the commodity and option trading system designed to time your gold and silver buying and selling as gold prices move higher. But don't just buy without knowing when. To get the most profit from your gold trading....you will want to time your buy and sell points to coincide with the highs and lows in gold.

With gold experts like Jack Filkey projecting gold at over $2000 an ounce by the end of the decade, many investors are realizing that there is some real profits to be made when gold prices rise.
October gold update....Gold getting ready to make another price move taking out the previous high of 1033.

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Green arrow on lower part of chart shows when Gold Prices rached "critical buying mass".

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