A senior figure at Clearbrook Financial LLC has claimed today (January 28th) that the major fiscal deficit being accrued by the US government will boost anyone with a long-term gold investment, Reuters reports.
The US treasury revealed recently that its outstanding debt stood at $5.5 trillion at the end of September, with investors now believing a further $2 trillion could be added to the total as a result of its bank sector rescue packages.
Now Tom Sowanick, chief investment officer for $22 billion worth of assets at the Princeton-based firm, has explained that gold prices seem certain to rise when such huge debt begins to unwind.
"I think gold is rising because of fiscal deterioration and the prospect that the US may be downgraded," he told the news provider.
Those sentiments were strongly corroborated by Roberts Lutts, chief investment officer of $400 million at Cabot Money Management in Massachusetts, who has predicted a strong downturn in the dollar.
As the greenback tends to track in the opposite direction to gold, this would be a huge boost for anyone with an investment in the yellow metal.
"They are printing trillions of dollars worth of currencies, and there is no real asset behind it," he told Reuters.
"So every single dollar in my pocket is going to be worth less and less every day."
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