Many people believe that gold is an investment product that can ward off inflation. The history has proven that gold would be hired if there is a panic that could endanger the nation’s economy, such as high inflation, financial crisis, or war.

Inflation is rising prices of goods and services in general. Inflation could undermine your money. If the assumption of inflation is 15 percent per year, the price of goods & services that are now worth 5 million, will be 10.06 million, or twice in the next 6th year, and 15.3 million or three times in the next 9th year, and so on.

According to severity, there are three types of inflation:
1. Moderate inflation, when inflation rate was just under two digits per year (below 10 percent)
2. Malignant inflation, when inflation rate is in two digits per year (10 percent – 99 percent)
3. Hyper inflation, when inflation rate is in three digits per year (100 percent or more)

If you are not decision makers in government, you probably can not go down the inflation rate. All you can do as individuals, is how you can take advantage of the occurrence of inflation. How do I? I suggest you invest on instruments that will increase rapidly in the event of high inflation. What is it? The Gold.

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China’s government said it would change the strategy of investing in foreign currency reserves which now reach 2.5 trillion U.S. dollars.

State Foreign Exchange Administration Bureau (SAFE) does not give any explanation to such exchange will be allocated. Government of China has not confirmed will change the type of asset allocation and currency to be used.

Previously, the Government of China had announced that their investments in Europe a key market for the fund is currently investing their wealth. The economists estimate, China invested 65 percent-70 percent of their funds in the form of United States dollars, while 20 percent-25 percent of the rest in euros.

“China will adopt a prudent and active principles in managing their wealth,” SAFE said in his statement on the website.

Description is made when Foreign Minister Qin Gang said that the government need not be too worried about the debt they hold. The statement is a comment on the statement made by the U.S. Senate, who asked Obama and his cabinet to check and manage the risks of U.S. foreign debt.

“It should not be politicized,” said Qin. He affirmed that anyone who sells bonds must comply with prevailing market

Stocks on Wall Street reversed course as well as its best record in the last nine days. Ease European concerns over the crisis and improving energy stocks make stock index rebounds sharply on Wall Street.

In trading Thursday (10/06/2010), the Dow Jones index closed sharply higher to 273.28 points (2.76%) to the level of 10172.53. Index Standard & Poor’s 500 climbed 31.15 points (2.95%) to a level of 1086.84 and the Nasdaq gained 59.86 points (2.77%) to a level of 2218.71.

Energy sector shares led the strengthening of the S & P energy index rose 4.9% was recorded. Shares of British oil company, BP Plc, which had slumped sharply finally rebounded 12.3%, Exxon Mobil rose 3.10%.

Energy stocks are also driven by rising crude oil prices to above U.S. $ 75 per barrel. Light, sweet crude oil contract rose 1.5% to a record level of U.S. $ 75.48 per barrel.

The positive sentiment came from Europe namely after Spain was able to sell bonds worth U.S. $ 3.9 billion euro, with investor interest that looks large enough to be a positive sign. This makes the euro’s position improved to 1.2% and traded above 1.21 dollars.

Good news also came from China which recorded an increase in exports up 50% during May compared to last year. It assuage investor fears the crisis will impact Europe to the global growth.

“Bid bond running good and strong Spanish China exports very profitable. You get some good news for some big stocks driving the market,” said Brian Lazorishak, Chase Investment Counsel’s portfolio manager, as quoted from Reuters, Friday (11/06/2010).

But trade is not running too busy with transactions in the New York Stock Exchange reached 9.16 billion shares, below average last year reached 9.65 billion.

World Bank says developing countries are now leading the world economy post-crisis recovery process in America and Europe amid the collapsed economy. This was conveyed by Senior Economist Justin Yifu Lin of the World Bank World Bank in a teleconference on Thursday (10/06/2010).

“The performance of developing countries improved in the era of multi-polar growth is very encouraging,” he said.

World Bank predicts world GDP will rise by between 3.1 to 3.3 percent in 2010 and 2011, then rose to the range of 3.2 to 3.6 percent in 2012. Economies of developing countries is estimated to grow between 5 to 6.1 per cent per annum in 2010-2012, while developed countries only around 2 to 2.3 percent in 2010.

Justin emphasized, so that recovery can continue to run, developed countries must be able to take the opportunities offered by growth in developing countries.

Meanwhile, the World Bank’s Global Macroeconomic Manager Andrew Burns said developing countries are not immune to the impact of the crisis. Yet for the world economy continues to go well, developing countries are expected to continue to focus on growth strategies, simplify the way businesses and strategies for more efficient spending.

“Their purpose is to ensure that the investors can distinguish between them with a risk of risks in developed countries,” he added.