The price of gold is at $5,306 per ounce for the first time ever.
The spot price for silver reached $109.448 a troy ounce.
The Dow Jones Industrial Average remains over $49,000.
The U.S. dollar lost .6% and so it’s worth in gold is only about 0.000189 of a troy ounce of gold.
So, who is to be trusted in their evaluation of our economic future – those who buy gold or those who invest in equity stock?
And if gold and stocks are up, but the purchasing power of the dollar is down, how does the middle class and the poor benefit?
Who is funding the aggregate demand for goods and services, which in the long run, drives national economic performance?
The Wall Street Journal opined that:
It’s unfashionable in many precincts to admit it, but the market for precious metals still sends useful signals every once in a while. Gold’s ascent above $5,000 per ounce – or as some might say, the dollar’s drop to less than 1/5,000th of an ounce of gold – is one of those signals and it doesn’t speak well of investor confidence in the world’s political leaders. …
But markets are signaling a case of nerves about recent developments around the world – and perhaps also hedging against the dollar as a safe investment. Speculators may also be piling into gold, which is reason for non-rich investors to be cautious at such a lofty price. Gold has fallen before as suddenly as it rose.
We live in uncertain times. And the regular occurrence of boom/bust cycles in financial markets since the rise of capitalism – the tulip mania – contributes to uncertainty.