Wednesday, September 9, 2009

Maestro Speaks: Gold Is Real Money

Gold Rally Signals Move Away From Currencies, Greenspan Says
(9/9/09 Bloomberg) [emphasis is mine]

"Sept. 9 (Bloomberg) -- Gold prices that jumped above $1,000 an ounce this week are signaling that investors are buying metals to hedge against declines in currencies, former Federal Reserve Chairman Alan Greenspan said.

"The gains are “strictly a monetary phenomenon,” Greenspan said today at an investment conference in New York. Rising prices of precious metals and other commodities are “an indication of a very early stage of an endeavor to move away from paper currencies,” he said."

Mr. Greenspan seems to be back to his roots ("Gold and Economic Freedom", 1966). Not only that, he seems to speak English that we the commoners can easily understand. That's refreshing.

His "very early stage" should be encouraging to gold investors, and to CEO of Barrick Gold Corp. who just announced that the company plans to eliminate all the gold hedges.

Greenspan also observes:

"“What is fascinating is the extent to which gold still holds reign over the financial system as the ultimate source of payment,” Greenspan said.

"China, the world’s fastest-growing major economy, will continue to be a “large consumer” of commodities, including energy and metals, Greenspan said.

"“China is turning out to be the 900-pound gorilla in the energy and commodity market,” Greenspan said. “The increase in oil consumption in China has been quite extraordinary.”"

And China may be turning out to be that in precious metals, too.


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