marketoracle.co.u
Fear of Severe Inflation Driving Investors into Gold
The shadow banking system’s huge and growing toxic debt (IMF revised upwards their estimates from $2 trillion to over $4 trillion) looks set to impede any progress in fixing the ruptured international financial system. Obviously, this has negative implications for the global economy and may lead to a new Depression. Gold’s wealth preservation attributes will continue to be sought after as our financial and economic ills look set to be prolonged.
There were some $43 trillion of credit default swaps (at year-end 2007) according to the Bank for International Settlements and total derivatives of over $500 trillion and if only a small percentage of these “financial weapons of mass destruction” go wrong or are marked down sharply then we will face the horrible vista of a systemic crash which would likely lead to a monetary crisis.