Dragging out of the recession pit

Voila!!!! do we hear everyone talking about the recession under control? Well when you think about it prudently, markets seem to jump and dive at every other good news or bad news. But the truth is far from what one thinks it to be. The market rallies when the US Federal Reserve keeps the interest rates near zero, then the markets drop when news trickles in about Central banks from various countries may withdraw stimulus packages. So it is very clear that markets are simply doing well most of the time just because the cash flow is continuing into the financial system to keep markets from falling and economies keeping a bold face in front of investors.

Lets hope a solution which solves the above two comes out quickly before Central banks run out of cash themselves!!!!!

Who is in more trouble - Europe, US or Asia?

'Who is in more trouble?', well all 3 are and there are no exceptions and no continent can escape economic recession. It is like a huge chain, downfall of the housing market and dire unemployment in the US directly affected the European and Asian countries. That is why we see governments in all these continents have been coming up with stimulus packages to minimize the problem if not stop it.

According to Nader Naeimi, a Sydney based investment strategist with AMP Capital Investors, said: "These sorts of stimulus measures are steps in the right direction. We need circuit-breakers to unlock the credit logjam." (source: bloomberg.com).

Australia wants to be away from recession as hence the government announced $42 billion Australian Dollars more. But there is still pessimism floating in the market, like one Chief Asian economist at Credit Suisse Private Bank in Singapore, Joseph Tan said:"Stimulus measures will help minimize the downside to some degree in the short term. There’s always that shadow hanging down our heads. Jobs are still being lost, consumption is coming down and economies are falling." (source: bloomberg.com).

Hence, all economies are in trouble and are likely to come to the stage of recession at some point in the future and stimulus plans are going to give relief in the short-term and not long term. There are tough times ahead for all, so be prepared.

Is anything else precious than gold?

Gold is a very good investment is what we hear all the time. But due to the volatility in the markets it is risky to trade with the precious metal on the live markets. It is safer to buy physical gold these days. Lesser demand from countries like India, China and the Middle East has also hampered the demand for the metal in recent days.

Volatile markets give investors the only option of buying physical gold since gold is seen as a hedge against inflation related risk. Some also believe that owning physical gold is a priviledge in times of recession and this was aptly quoted by Michael Pento, chief economist at Delta Global Advisors Inc. in California: "The government can print endless money, but they cannot increase the supply of gold. Anything the government cannot replicate by decree, I want to own.” (source: bloomberg.com).

Hence, at this time, gold is the best bet, but buy gold outright, trading in gold in open market is still very risky. All the best with your gold purchase.