Gold as a Hedge Against Uncertain Global Conditions

The Global economy presents not only some fantastic financial opportunities for savvy investors and traders, but, inherent in this very interconnected world village, are some very real risks of a global economic melt down. Think of all the economies of the world interlocking, one nation's major financial problems or breakdowns could lead to a�chain of reactions, that will leave no�nation unaffected.


In the case of a melt down of one the G-7 plus Russia, the seven major world economies; Canada, France, Germany, Great Britain, Italy, Japan, and the United States, the consequences would be horrific.

Here are just a few of the simmering international crisis boiling beneath the surface. The vast world wide debt burden, that effects most counties, especially third world countries, if there were payment defaults by several debtor nations at one time, a serious crisis would result. Two of the most serious problems are the massive banking crisis that has Japan on the horns, and huge budget and trade deficits that are endemic to the USA

The Government of Japan has put the cost of a bank bailout package at over $500 billion (60 trillion yen), they have yet to come-up with the money. Japanese politicians, so far, have chosen do lot of talking, but little action has been taken to resolve the problem. Technically most of Japan's major banks, are bankrupt, but since the government is the guarantor of almost all banking assets, the banks remain in a state of limbo.�

Both the Japanese real estate and stock markets have fallen massively since the bubble years. This is cause for concern, because Japan is one of�the largest holders of USA government Treasury bonds, in a crisis caused by either severe earthquakes, and/or a banking collapse, they would have to cash out their trillions in bonds, and this could trigger a nasty reaction in the US markets.