Thursday, November 12, 2009

Gold prices and the economy

Gold prices have set record highs recently, as the dollar continues to weaken.


Why should this matter to those who are concerned about real estate in Central Pennsylvania? Because gold is an indicator of weakness or strength in the dollar. As the dollar weakens, prices of commodities in general will tend to rise. These price increases will include oil, building materials and other commodities whose prices directly impact the real estate market.

The price of gold does not cause the other prices to rise. The price of gold merely helps indicate the direction of other prices. As we await the disaster that must surely follow the government's trillion dollar "stimulus" bill, gold prices will help provide an early warning of the deluge that is to come.

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