Why Stocks, Gold & Real Estate Going Up and Up?

 

Why Stocks, Gold & Real Estate Going Up?

Many readers in the past few months have asked me that, if the USA is passing through the recession and there is global economic slow down than why the stocks, gold and real estate prices in India and all around the world are going up and up?

This is because a logical mind can’t understand this thing. I mean if there is a recession than ideally the stocks, gold and real estate should go down right? But here its totally reverse.

I mean have you ever think that why the asset prices are ballooning even though the world is in economic slow down and recession?

Well, it is because now the Central banks and Governments (USA, China & Japan) from all around the world have started printing new money out of thin air. When I am writing this article, literally billions and trillions of new money is being created in the economy and this newly printed money is artificially ballooning the asset prices by diluting the purchasing power of the existing money in the economy.

In November 2010, the US Government has planned to print more US $ 600 billion out of thin air by QE2. And basically this newly printed money is flowing into the emerging markets like India causing artificial inflating of the stock markets, gold and real estate.

What Average Investors Should Do Now?

It’s now time to become financially smart. As I have already told you that the asset is more valuable than the money. So buy assets out of your money. Don’t save your money but save and invest your money now.

Another advise I would like to give to the people that, Bank Fixed Deposits, PPF, Post-office savings schemes and other fixed income instruments are now worthless. This is because the newly printed money will shrink your wealth in the fixed income instruments by causing higher inflation. So learn to invest in equities.