Investing in Gold and Achieving Our Glory
 
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The Swiss National Bank decided it was going to print unlimited amounts of francs to stem the rise of its currency against the euro (by pegging it to the euro). The Governing Council of the European Central Bank has been informed by the Swiss National Bank about its decision to "no longer tolerate a EUR/CHF exchange rate below the minimum rate of CHF 1.20."

Switzerland is the latest country that has decided to engage in massive amounts of money printing. The Swiss decision has bullish implications for gold and gold stocks. It is becoming more and more obvious that the only solution to the currency wars is a gold standard.

It should be noted that the Swiss National Bank previously implemented a fixed exchange rate regime in the 1970's. It was an epic failure because inflation surged to almost 8%. Similarly, this time around, there will be negative implications for most Swiss citizens. Yes, Swiss export companies and manufacturers might benefit from a lower Swiss franc. However, all of the Swiss people will have to pay for this temporary economic benefit via higher inflation. As we've noted before, inflation is particularly painful for the middle class who have little in the way of assets.


 
 
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Nowadays routine gold - silver buyers and sellers are in big turmoil especially in countries like India, where most of the traders run business in traditional fashion. The price tracking methods of these traders are very poor hence they are unable to rationalize the price movement of the precious metals and as an upshot they incur huge loss in business. The business and trading of precious metals has become highly arduous and full of intricacies, therefore traders require either high - tech enabled systems or advisors to stay in the business but sadly this is beyond their reach.

The small traders do not understand the various multi - dimensions of price movement viz. economies, investment demand, sovereign currency and safe haven demand. The prices of gold heading for $2000/oz and silver prices also all set to test $50 levels. Given the fact that the beta or market volatility of prices has knocked record high level and the money of small traders is diminishing day by day. The situation becomes grimmer in case of those who know about Morning Stars and Evening Stars (candle stick patterns) because they are unable to defeat the emotional tide or presume the Japan's earthquake or Obama's mind. This shows the uncertainty in the system which affects the prices of precious metals so as small traders, who cannot withstand the high variation in price in short span of time and as an upshot the incur small to huge loss.