Hey Ben, Gold Is Money Whether You Like It Or Not

Despite

from the "all mighty Bernank" that gold is not money, gold has been rising at an accelerated rate in recent trading session on concerns over any number of different reasons. Weaker than expected economic growth. The debt ceiling potentially not being raised. The possibility of default. Europe sovereign debt crisis du jour. All of this has led to $1,600+ an ounce gold that looks like a run away freight train. “Increasing the debt ceiling is not going to make the debt go away, while the debt problems in Europe aren't going to be resolved overnight, and we're seeing all these getting reflected in the weaker economic numbers,” said Zhang Yingying, an analyst at brokerage Galaxy Futures Co. to

Gold has climbed to levels not seen ever in both New York and London trading, and if we continue to see weak economic data from the U.S., as well as abroad, there could be no stopping the gold train. Yesterday, the July ISM data was released, and it came in well below expectations, at a reading of just above 50, 50.9. Expectations were for a reading over 54. Over 50 indicates economic expansion, but just barely. “All the ongoing economic uncertainty and fears of a downgrade of the U.S. AAA sovereign rating are gold supportive,” Andrey Kryuchenkov, an analyst at VTB Capital in London, wrote in a report. “Weak macro numbers would also delay the tightening cycle in the U.S.” Gold actually dipped yesterday after the House of Representatives passed a bill raise the U.S. debt limit and cut federal spending, with the Senate voting on the bill today. That was no matter, and gold is zooming again this morning, up another $19 an ounce this morning. So far, gold is up 15% this year, up eleven years in a row. We have seen

for $2,000 an ounce by the end of the year. Jim Rogers, noted investor and U.S. dollar bear, has said that gold will continue to soar on the policies of the U.S. government. Gary Halverson, regional Australia-Pacific president at Barrick Gold Corp.

, said that prices are “well-supported at current levels”. We continue to see strong demand, from both foreign central banks, retail investors, and speculators. In fact, The Bank of Korea bought 25 tons over a one-month period from June to July for the first time since 1998. We are also moving into the Indian gold buying season, and there is no reason to think that India, with its population of nearly 1 billion, will slow down its demand. Despite what Federal Reserve Chairmen Ben Bernanke thinks, gold is money. Just ask Ron Paul what he thinks. There are serious inflows going into the precious metal and it does not look like it is going to stop anytime soon. As such, traders need to be prepared for the precious metal to hit $2,000 an ounce, and perhaps beyond.

Traders who believe that the U.S. economy will fall apart might want to consider the following trades:

Traders who believe that the U.S. economy is likely to recover faster than anyone expects may consider alternate positions: