Thursday, January 21, 2010

Everyone's Gotta Be A Brown-Watcher

One of their ranks is now Patrick A. Heller of He ends up drawing the conterintuitive conclusion that gold and silver will rise as a result of Brown's election:
President Obama has devoted a significant amount of his time in office and political capital in trying to enact legislation for a major modification of health care. There is distinct possibility that now either nothing will come of this effort or that it will be extremely watered down.

Unfortunately, a President whose legislative agenda lacks widespread public support sends a signal to the rest of the world that the U.S. economy and the value of the U.S. dollar may be on shakier ground than formerly perceived. In this circumstance, the normal response from foreign investors and trading partners would be to reduce their U.S. dollar exposure against a risk of further decline in the value.

Almost certainly, some of the funds pulled out of the U.S. dollar will result in higher demand for precious metals like gold and silver. This would likely push up their prices.

Well, that's one way of looking at it...

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