Good Morning--It's a Bad Day--Stocks down, Gold up

Not a surprise, the major U.S. stock indexes are down two or more percent this morning (futures). Gold continues to mystify many and is up at a new high for 2009 above $960 a troy ounce. Is Gold becoming the world's second reserve currency?

The markets are awakening to a the new reality--massive amounts of debt securities are coming to the market this year. Is this a surprise? No. But, it does leave one with a bit of uneasiness--the Italians call it 'agita'.

This morning the world markets are facing a new reality--widening credit spreads and the real possibility of defaults by major Japanese companies.

One part of the new reality could be the buying of gold by Central Banks. It appears that the central bank in Russia is purchasing gold. World central banks have been selling gold for than a decade--are they about to turn buyers?

I have been telling people for years that I expect the Chinese to become massive buyers of gold. I am old enough to remember when massive new orders for gold by Chinese came pouring out of Hong Kong each morning--that was in 1978-1980. Gold soared from $135 and ounce to over $800. Asian demand helps gold break $960

Also see:
S&P heads to first quarter ever of negative earnings
Global Stocks Retreat, Led by Banks; Gold, Treasuries Advance
Bailed-Out Banks Charge Taxpayers Highest Fees in FDIC Sales

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