January 28, 2011 - There’s plenty of bull left in gold bullion because there’s plenty of ‘bull’ in the government’s fiscal policy. The housing market is entering its second dip, more states are losing jobs than are gaining, and durable goods orders are on the decline. On top of it all, by even the most optimistic predictions the deficit will be nearly double the growth in GDP this year.
Despite that, many investors still believe that the recovery is just moving a little slower than was hoped. Wake up already! Current policy is bucking the currents of change, doggedly trying to rebuild an unsustainable economy by reviving “the industries that need to be cut down to size – finance and housing”.
That’s the perspective of Bill Bonner, founder of the Daily Reckoning. Bonner argues that we have not been going through a recession at all but rather a “Great Correction.”
Recessions are a normal condition in the cycle of healthy economies, but corrections occur when the economy is completely out of whack with current conditions. “Recovery” in a correction can only return the economy to that undesirable state when what is really needed is “a change of direction...an adjustment to new circumstances.”
We leveraged our future on credit as we bought into the fallacy of service sector jobs replacing those lost in manufacturing. Our faith was bolstered by the housing bubble, which helped conceal the crisis brewing in the job market.
That system had to collapse because it had nothing to do with real conditions. While the government persists in its doomed policies Americans must “make the sort of changes that they need to make – in their personal finances and in their investments.”
That begins with stronger positions in gold bullion, which will keep the bull market running. And at current gold bullion prices there could be no better time than now to get started.
