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  • Why Americans are Buying Gold [Edit or Delete]0 comments
    Aug 3, 2011 11:33 AM | about stocks: GLD
    I'm unofficially crossing the picket line in my own personal writer's strike so shed some light on why gold keeps going up.
     
    The main reason why Americans are buying gold is not as a hedge against a falling dollar or because of the debt, but because they are hoping that they will be able to exchange their gold, at some point in the future, for more DOLLARS than they paid for it. And that seeing the price of gold rise makes them feel wealthier in terms of dollars. It's really that simple. Does that mean the buying is irrational? Not necessarily because gold demand is a global phenomenon and it serves many purposes ranging from the aesthetic to industry. But when a contributor on some forum is bragging about how well his gold is doing relative to the rest of the market you can be certain he's envisioning dollar signs, not ounces of gold on a weighing scale. The dollar is still the universal measurement of wealth. No one says 'I'm worth 606 oz'; instead they say 'I'm worth $1 million dollars '. 
    Stocks: GLD
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