To Hold And Not to Fold is The Question, as Bush Tax is Set to Expire by 2011

By Elizabeth Kraus

Do you feel like your going up the creek without a paddle, spinning your wheels to understand what’s in the next financial crisis? You are not alone! The trend of what may lay ahead, a bad day at the office, or suddenly being unemployed, is like the budget, changing every hour, everyday. So what do you do if the Bush tax threatening to expire by 2011 happens? And or will the gold still rises against the top marginal income-tax rate set to increase on the first day of 2011 to 39.6 % from 35%. And, will it hold against the phase-out of itemized deductions that will lift that, effectively, to 40.8%. Or in 2013, the 3.8% Obama’s health-care tax on investment income that will kick in, make the top rate 44.06% to such degree, that this tax hike will push us into double-dip territory?

But, what is this new word, “Double Dipping” added to our lexicon?

It used to be a 2 scoop of ice cream but now, its a financial meltdown–referred to a recession—a double-dip recession, with a W shape on the chart. A recession followed by a short-lived recovery, dove-tailed by another recession. That’s double dipping, which may create an avalanche, which could be positive implications for precious metals. “If there is a double dip, it will be a reflection of a long-term economic crisis,” that may be good for gold,” Paul Walker, Chief Exec., of GFMS (Gold Fields Mineral Services) said yesterday from Tokyo. Any increase in investment will likely “push gold towards $1, 300,” he said.

With that said, the euro tumbling to a four-year low against the dollar amid investors, there is a concern that Europe’s debt crisis may engulf the heart of Europe, Hungary, and spreading beyond Greece to more Easter Europe. European finance ministers put the finishing touches yesterday to a rescue fund backed by 440 billion euros ($524 billion) in national guarantees, seeding to halt the turmoil. Walked did not rule out the possibility that the sovereign-debt crisis may expand from Europe to other regions. But, that too will push Gold “significantly higher” than $1,300 an ounce, or by further $500 to $700”, he said.

So, Who said What said?

The Chief economist for City Group has called Gold the subject of the “longest-lasting bubble” in human history! Goldman Sachs has raised its medium-terms gold price forecast to $1,355 !

Japan’s biggest bank recently proclaimed assets held in Japan’s first exchange-traded funds backed by gold may increase eightfold in a year as investors seek to protect their wealth in the country with the world’s largest public debt. So if you purchase a good car, it will go to Japan.

But, if you spend money at Wal-Art, the money will go to China! Then, if you spend it on gasoline it will go to the Arabs, if you purchase a fruit and vegetables it will go to Mexico, Honduras and Guatemala, but unfortunately, none of it will help the American economy! So, stick with Gold…the surest commodity you can keep for yourself, and let it grow!

Mr. Soros, arguably the most famous hedge fund manager in history managing about $25 billion, has increased its investment in SPDR Gold Trust, the world’s largest exchange-traded fund for metal, by 152%. He said: “When interest rates are low we have conditions for assets bubbles to develop, and they are developing at the moment. The ultimate asset bubble is gold.” And, while prices have fallen 9.2% since reaching a record, in a Bloomberg survey, they say gold will reach a new high, with the median forecast predicting a 17 % advance to as much as $1,300 an ounce this year…

So, Who’s going to Win, The Tortoise or the Hare—

Now that everyone is grasping for a new topic having grown weary of talking about that whole oil-spill-thingy, as the quieter summer winds up into autumn, its time for all of us to leave the magpie-nest and make solid sense in resource investment.

You might have noticed, if you’ve been following the Gold trend for longer then 30 seconds, that the gold price at hand is never the gold price in question. Analysts and commentators tend to run towards the fondness of the Pizza Eating Contest mode of speculation, in which the current state of things is rapidly stomached and barely digested before focus turns towards the next dip in the dollar, the next economic headline, and above all, what are the implications for precious metals!

As the joblessness recovery continues, with a high unemployment, and housing across the country, none of us are immune. We have friends, relatives, neighbors who have been laid off, and no sight to get a new one! Older workers are laid off first, and they take the longest to find new jobs, and now with the unemployment checks running out at the end of this month, which used to make people feel like they are still part of the labor force, 3.2 million will have a few glimmers of hope in their job search—all the while the country waiting for another stimulus, or risk a double dip recession. I’m afraid, the look behind the numbers suggests that liberal policies will hand us a double dip whether we get a stimulus or not…So, while millions are unemployed, having no money for gas to look for a job, Federal budget deficits will further erode confidence in the once almighty dollar, putting more pressure on the Federal debt to print more money. Although this deprecated and debase the dollar, we need to focus on the flip side, which brought a higher price for Gold investors!

The discouraging business conditions in the United States that already have serious detrimental consequences for the Federal budget deficit, for U.S. treasury funding requirements and the bond markets, for U.S. monetary policy, for the U.S. dollar, and Wall Street—all will benefit Gold.

Slow like a Tortoise but safe, Gold has enjoyed a steady increase for the past decade as the best option. Since 1999 the price of Gold has risen from $271 p/ounce to 1,180 and going. Gold trading with 1.5% of a record may rally to an all-time high as investors seek a heaven. As a Hungarian gypsy once said to me while tapping my little gold coin to his teeth, “I can’t eat this gold, but sure can buy food with it for my children!”

Gold have been around for 3,000 years, or so. So, who wins the animal that takes off without thinking or the reliable slower one, the one that continues at a constant, although slower pace that will provide stability and steady term investments in the future? Gold for all its boring, basics is something else—reliable! So, if the bank returns your check for insufficient funds, you call them and ask them if they meant you or them! If you want to learn how to get into physical gold visit the nations top precious metals dealer www.regalgoldcoins.com.

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