What will happen with gold in 2012
We all understand that it is difficult to predict the future with great accuracy. Nevertheless, occurred in 2012 can be quite predictable for one simple reason – the global financial crisis and has not been resolved over the past few years.
To solve the financial crisis, governments and banks to take a few more important decisions on the allocation of financial assistance, and this despite the fact that they themselves already, if not bankrupt, then they may soon be available. In short, the perspective is not the best.
Upcoming future developments can be put into words the head of the Bank of England Mervyn King, who said in an interview in late 2011: “We are living through now is probably the most serious crisis that we’ve ever seen, at least since 1930year. We are dealing with very unusual circumstances. ”
In an interview with Mervyn King used the phrase “extraordinary circumstances” to describe the current situation. If you look into the past, usually after crises and defaults on debts of princes and kings, as well as some countries are almost always going to get a refund of those countries. Therefore, the term “unusual circumstances” regarding the current situation in the world can mean the seriousness of the current financial crisis, as well as all its depth and duration.
Mr. Merwin also stressed that “central banks should react calmly to the circumstances and make the right decisions.” But if you look at past decisions of central banks, do they ever make the right decisions? To understand this, just look at the price of gold.
Gold is the barometer by which the wind blows to financial problems. The rising price of gold is directly proportional to the problem reflects the monetary system. So in 2012 we can expect continued growth in the price of gold, as it was last ten years.
First, central banks continue to print money. This tool central bankers are constantly resorted to solve all financial problems of today, which inevitably leads to loss of purchasing power of national currencies, or in other words inflation.
Secondly, people are increasingly expressing their concern over safety of the banking system. In recent years, several major international banks were bankrupt.Here are some of the most famous: Northern Rock in UK banks Bear Stearns, Lehman Brothers, MF Global in the U.S., the French-Belgian bank Dexia. The problem of bank failures has become worldwide phenomenon.
Third, the interest rate on deposits has become so low that no longer compensates for the risks assumed by the investor, giving money to the bank. The interest rate even lower inflation, which leads to a loss of purchasing power placed in the bank money.
You can call and other problems of the global financial system that have a negative impact on the national currency. But gold in this situation may become a safe haven asset, for capital.
Although the future to predict and hard, but each of us has a choice. For the past 5000 years gold has been recognized as a form of money. During this time, gold has proven itself as a reliable means of payment for the conservation and welfare.Therefore, in times of uncertainty and unpredictability of gold is always the best choice.