Gold is getting shinier

There are three big themes going on in the world right now, and a lot more other ones (not saying they're less important, but I will not be covering them in these next few posts). I will cover one topic each post... though don't expect the posts to be caulk-full of figures and cited arguments. They're still just broad strokes which can be backed up by sound logic and figures if you look/read around.

The three themes:

• US debt ceiling
• Eurozone crisis
• China's inflation

Today's theme: US debt ceiling

If you read the "guest post" on Friday, you would know how things stand on the debt ceiling. Suffice it to say that if the US doesn't raise its debt ceiling and defaults on its loans... the credit rating of the US will go kaput, and yields should rise.

Sure, USD is a supposed to be a safe haven for money as the world's reserve currency, but how safe is it when the country's government can't agree on paying back those loans? Sure we're at an unsustainable spending spree brought on by our understanding of the capital markets, but still... stop looking further down the line when you are about to shoot yourself in the foot.

What does this mean? New safe havens of money. The JPY and the Singapore Dollar look to be the favorites of the smart money, and of course things that hold universal value... such as gold. Even if the debt ceiling is raised, there will most definitely be the cautions of "having a close one", and investors might decide to take a little away from their US Treasuries safe-haven into other "safe" investments.

August 2nd is the date of reckoning. That leaves 3 more weeks to reach a compromise. What do I think is going to happen? They're going to come up with something. The US government might be obtuse, but they're not stupid. However, gold is king in moments of uncertainty... and there are plenty of uncertainties to pick from.