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The shift of investment capital into commodities is bound to continue

November 15, 2010 – If you have been putting off investing in gold bullion until after the G20 summit, waiting to see if the group succeeds in stabilizing currencies, the outcome of the meeting is now clear. If anything, the outlook for the global economy is even worse today.

Much of the crisis in emerging Asian economies is due more to fear than actual threat. One of the very few things that changed with the summit is that China garnered support for its claims that US monetary policy will bring financial disaster to Asian nations, dangerously fueling that fear. With such rhetoric dominating the meeting, the group could not even agree on the causes of global economic imbalance, let alone suggest positive actions to take. More surprisingly – and potentially more damaging – the committee failed to reach consensus on the importance of the currency crisis in regards to the imbalance. How a summit that began with such a clear agenda and well defined issues could degenerate into a debate over the most basic issues is puzzling. How the meeting could adjourn with crises threatening global economic stability, resolving only to reconvene in another year, is absolutely mystifying.

Ireland’s economic problems are growing to a point where they may have to be bailed out by the EU/IMF rescue fund while elsewhere in Europe the sovereign debt crisis is escalating. Already a deluge of foreign capital resulting from western stimulus measures is threatening to destabilize many emerging economies, further accelerating the move towards global economic and trade wars.

Only vague promises of corrective actions by nations such as China were produced by the G20, far too little to engender any sort of optimism among global investors. The shift of investment capital into commodities is bound to continue and the importance of gold bullion as an alternative monetary asset can only grow..

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Jonathan Monroe

Senior Staff Writer -

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