Segment 1: Between a Rock and a Hard Place SEGMENT BEGINS AT 00:38 Economist Jerry Robinson provides his signature commentary on the momentous news stories that have been making waves in the financial world and shares profitable investment strategies, as well as...
by Jerry Robinson | FTMDaily Editor-in-Chief
AUSTIN, August 10
It is another embarrassing day for those who claim that gold is a bad investment, or is in a "bubble."
In an interview on CNBC today, U.S. Rep. Ron Paul reiterated that gold is not in a bubble. Instead, the spike in gold prices has much to do with a flight to safety by investors seeking refuge from the crumbling value of the U.S. Dollar. He stated:
"What's happening today and what I see is such a serious thing is I think what we're dealing with is the end of the dollar reserve standard. That's a worldwide phenomenon. It's not just for the United States, just think of how many dollars we've exported. How many people hold dollars. If this dollar is in big trouble, which is what I think is the problem, I mean this is not just a minor problem. This is probably a bigger problem than the world has faced before. Never has been a fiat currency been used as a reserve standard as so pervasively around the world. And there's not many other places to go, even though Treasury bills but eventually they're going to give up. I mean, just ooh what's happening to the Swiss Franc. So there's not much left other than commodities, you know, and real values. Actually, I think that is what is going to happen but it is going to reflect the devaluation of the dollar,"
As fear spread throughout the global financial markets today, the price of the shiny monetary metal rose dramatically, surpassing $1,800 per ounce for the first time.This week, amid investor concerns over European banks and the U.S. credit rating downgrade, gold enjoyed its biggest rally since 2008. Learn more about investing in precious metals, like gold and silver, here.
Stocks, on the other hand, have been battered this week. For the fifth day in a row, the Dow Jones Industrial Average moved over 400 points throughout the day. The three major U.S. indexes were down around 3% today.
The large amount of volatility has caused the stock prices of many well capitalized companies to drop dramatically. I believe that, while the underlying causes of this crisis are real and serious, Washington will soon intervene, allowing the markets to stabilize.
To see what stocks we are adding to our FTM Investment Portfolio, click here.
Oil prices have also plunged this week. Read our latest update on oil prices here.