Gold Still Looking Good

Gold is expected to reach $2,000 per ounce within the next year

, ending a decade long bull-run in the commodity. That"s if the economy recovers as expected and interest rates rise. Traditionally, the precious metal is used as a hedge for investors against inflation in turbulent economic times. Recent drops in the price have prompted many investors to sell gold, fearing that it has already peaked. However, there is still plenty to worry about in the global economy with slow growth, severe austerity measures taking effect causing public unrest, and stubbornly high unemployment, not only in the U.S., but across Europe as well.

The recent bailout of Greece illustrates the still calamitous state of global economic affairs. The Mediterranean country that was the original founder of democracy was on the precipice of default on its bond payments and thus a credit downgrade that would throw it into insolvency. As part of the Eurozone, it shares a common currency with the other Euro member nations. Some of those nations, like Germany or Luxembourg or Austria, are much more financially sound than others""say Greece or Italy or Portugal. One example of Greece"s reckless fiscal behavior was its option to take retirement as early as age 50 with full pension benefits. That stands in stark contrast to the earliest American retirement age of 62. Those fiscally responsible nations were faced with the prospect of the collapse of the Euro, in the case that Greece was allowed to declare bankruptcy.

Rather than go down the bankruptcy road, Germany, the de facto financial sovereign of the European Union, agreed to bail out Greece, but only under severe austerity measures. Greece accepted the bailout package with extreme cuts to those once lavish social safety nets. The Greek people did not take this lightly. In fact, they took their grievances to the street in major protests, causing massive dollar amounts of damage to private property. Greek police, clad in riot gear, have expended much time, energy, and tear gas in quelling the uprisings that continue to occur.

The protests in Greece can be traced back to the uprisings of the Arab Spring in the Middle Eastern countries of Tunisia, Egypt, Yemen, Libya, Bahrain, Syria, and many others. Most regimes were not destroyed, but many were greatly affected. At least four leaders were successfully ousted, Tunisian President Zine El Abidine Ben Ali, Egypt"s Hosni Mubarak, Yemeni Ali Abdullah Saleh, and Moammar Gadhafi in Libya, where rebels were aided in killing the dictator by NATO air forces. Both Bahrain and Syria have turned the military loose on their own citizens""Bahrain in February of 2011, and Syria currently. Since those uprisings, protests have erupted around the globe in America and throughout Europe, most notably through the Occupy movement. This unrest is unlikely to be quelled in the short term and will cause further economic turmoil. Thus, buying and selling gold will be very profitable for investors in the coming year.

by: schatzistef

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