Even though stocks like Citigroup (NYSE:C) and Bank of America (NYSE:BAC) surged on news of the bailout package for irresponsible EU countries would reach almost $1 trillion, gold still found some solid support as the realization what it may cost the economy after the smoke clears has gold holding on.
The illusion that the outrageous spending to be offered these socialist countries who refuse to stop redistributing wealth, will deal with the problem will come back to haunt those offering the money, as it will only postpone the inevitable, and ultimately will probably make things worse over the long haul.
Investors in gold understand this, which is the reason gold fell very little, even though financial news reports attempted to paint this as something that has relieved investors of concerns over safety. If anything, it will eventually reinforce it by just the inevitable pain of inflation that will come from this bailout, which will be added to the trillions spent over the last couple of years.
Gold investors know this doesn't deal with Europe's problems, and they know this will cause even more inflation. Once the hoopla was over, investors found support for gold not long after the announcement, showing they fully understand the implications and short-sightedness related to another misguided bailout of financially irresponsible countries.
Gold demand will remain, and probably increase from these misguided actions, as foolish politicians and central banks continue to take actions which could create the perfect financial storm as they continue to act as if printing trillions of dollars of paper money won't have any consequences. Investors in gold know different, and that will keep gold prices rising today, and long into the future.
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