Gold futures closed Monday at over $1,790, setting a six week high for the product. This is amongst a background of continuing EU struggles and without much relief to be found in the US either. With that in mind, is this a signal that fiat currency and economic wizardry is losing its value or is this just good news for ultimate sign of wealth?
It is not exactly surprising that gold has been witnessing a growing prospect: frankly, its been doing fairly well throughout this whole process as markets respond accordingly to the scramble occurring in the marketplace. The biggest reason for this recent spike, however, is the clear signal by Germany that it would not be using any of its gold reserves in whatever EU rescue plan is established. This is clearly a smart move, like many that have occurred from the nation, as they are able to witness tax cuts for the middle to lower classes while others are struggling through austerity measures.
This is hardly the end, however, for fiat currency and economic wizardry. Although potential republican presidential candidate Ron Paul would like the US to move back to the gold backed system, the truth is that we are probably for the best with our current system, no matter how illusionary and fictional it may seem. While it can become a headache to most, it does allow for some creative solutions, including quantitative easing. Now if only Europe could get a little more creative.