It appears that investors are buying gold, having now made the decision that they have lost confidence in the financial system, at least for the moment. This confidence tends to ebb and flow from day to day. Is this a reflection of the confidence level in President Obama's capacity to fix the problems that are overwhelming our economy? Perhaps investors are realizing that such expectations are unrealistic for one person, even if he is the most powerful man in the free world. Or perhaps there is a realization that these problems can't be fixed by government, no matter how often or forceful the interventions are. In any case, when confidence drops and fear reigns, people buy gold, and we are seeing the phenomena manifested today. Gold has closed higher the past five trading sessions.Just a few days ago, I posted here excerpts from a Citigroup memo that recommended buying gold, predicting that it would reach $2,000/oz., perhaps as early as this year. They also predicted that the current crisis would result in either 1) resurgent high inflation, or 2) severe political instability and perhaps even war.
