Club Mulgoa

Monday, November 28, 2011

Markets rebounce

The bounce is a fake. All market conditions yesterday was the same as the day before so why should all indices spike upwards? Governments can "fix things" but you got to get people to work, you can't generate debt without generating profit on your investments and you can't value yourself high if your service is not desirable.

With gold, you have to find and dig it up. And like Australia, Ghana and Argentina, you have to content with sovereign risk. People and central banks want that stuff even though it hasn't got much use other than for jewelry and a standard for "value". That creates a value called POG.

While there will be more faked bounces, I am mostly investing in gold and commodities that maintain their relative values. You need oil, you need phosphate/potash and you need coal.

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