The Year of the Investor - 2009 - By Charles Kubach, Mine-Engineer.Com Nov. 27, 2009 Normally, the price of gold is driven primarily by demand, and specifically, demand for jewelry. This is due to the fact that about 70% of all gold is used for jewelry. Due to the economic worldwide recession, and cataclysmic banking and investment house debacle, smart investors quickly shed paper investments for the security of gold, and they have prospered as a result. It is always financially prudent to have a portion of the portfolio in gold for such occasions, but during tumultuous times like these, where governments are spending money like there is no end in sight, the long term economic woes are just beginning. Smart investors are flocking to gold faster than a Bluegrass Thoroughbred Horse to the finish line. They will be rewarded, with the preservation of their assets, and even return on assets, as round two of the economic woes is just around the corner. It is pertinent to point out that investors have been driving the gold market in 2009, desiring to preserve their assets and hopefully make a few dollars, as well. Also, there are three predominant factors that drive the price of gold: 1) Supply and demand 2) Value of the US Dollar 3) The Doomsday Effect (Whenever bad times or turmoil occurs or is perceived to occur, Gold has historically been a safe haven for asset preservation) Normally the first and second factors are the predominant determinant in the price of gold, heavily weighted to the supply and demand. But in 2009, the Doomsday Effect has driven smart investors into gold at record numbers. They will flourish as a result of recognizing that big government and higher taxes will destroy business, not help them. The Obama Administration in the US is planning massive government programs to "put people back to work". They are planning a trillion or so dollars to be spent on health care "reform". They are planning to cause business to spend countless trillions of dollars to comply with their Green Initiatives, which Mr. Obama will unveil in Copenhagen, playing to his European Socialist friends. The Obama administration, in fact, has so many giant spending plans, they are too numerous to mention. However, they do not understand economics, just Marxism and Socialism, both failed political systems 100% of the time they are followed. How is the Obama administration planning on paying for this massive spending? Personally, I do not believe they have a clue, but they claim they will increase taxes on the wealthy. However, in reality, they have already proposed countless increases in taxes, fees and "passed on tax increases and fees", that will be borne by the middle class and the lower economic class. Still, they will run some record deficits, devalue the US dollar to its lowest point in recent history, prolong high unemployment and last but not least, probably create another recession. That is change, though, change you can believe in, if you happen to be a moron. Take employment, for instance. The good middle class manufacturing jobs began to disappear as many US companies refused to invest in technology that would make them competitive in a global market to increase their executives quarterly bonus, then jobs continued to disappear as US companies farmed out manufacturing overseas (1990's), again to pad the bonus check. They had no long term plan, which short term goals must comply with. Now, many of these companies are out of business and many others are but a shell of what they once were. Under Reagan economic policies, the Jimmy Carter Democratic Economy was in shambles when Reagan took office. Ronald Reagan undertook sound fiscal and financial steps that created the largest economic expansion in the history of the US, by enabling businesses to expand, invest and grow. The greatest growth was in the small business sector, where millions of small business flourished under a business friendly government, that did not over regulate and over tax them to extinction. They could have enacted a few regulations that would have prevented the current debacle, but that is the only mistake they made, economically. The middle class made a lot of headway under the Reagan administration, since they were the owners of these small businesses. The middle class flourished under the Reagan Economy, and made back economic gains they lost with the decline in manufacturing giants shutting their doors. The Obama economic policies will destroy the advances the middle class have made, and make it so difficult for any entrepreneur to start a new business, due to the landslide of anti-business regulations, increased taxes,and high cost of capital. But the Socialist Obama Administration needs this revenue to re-distribute to their pet projects (like building a bridge to nowhere, building up ACORN to buy more votes, fund pimps, etc.). Yes, that is change you can believe in, if your brain no longer functions. So, those with money will be served well by gold in the future, because the dollar will be worth less each day, the Obama policies will destroy the middle class advances in employment and income and cause the recession to re-appear. Note that they defined the beginning of the recession as a period of high job loss, but were quick to embrace the real definition of recession, (decline in GDP), when it suited their propoganda, as the GDP increased instead of declining. The Obama administration clearly does not have a clue, and we all are going to pay for it for many generations to come. It is time to replace these bums with those that believe in what made America great, small government, low taxes and incentives for business instead of punitive regulations, more layers of government overseers or czars and, their redistribution favorite, higher taxes. That is vote for freedon again for Americans to seek their own level of success, instead of having it dictated to them by the government. The quickest way out of a recession is to encourage business, not by growing the government. How to profit from the Rule of Idiots? Increase holdings in gold, look for undervalued investments that may prosper despite of the government and vote Republican, to effect real change. Gold's future has never been brighter, the USA's has never been dimmer. "The Sign of an intelligent person is not the realization of all they know, but rather the realization of all they do not know." Charles Kubach 1979 Return To Mining Information Page