Gold As An Investment
California gold nugget
So, now gold is trading at prices that are closer to what they “should” be (based on official inflation figures). I guess my question is: will the gold price become more stable (and more in-line with inflation) now (in which case, it should be expected to go up “long-term” at the same rate that inflation does)? Or will it be incredibly volatile over the “long-term”…as it has been in the past.
After all, according to this “inflation-based” argument, gold was “undervalued” from 1983 until sometime in 2009…and really didn’t start to play “catch-up” to inflation until 2001. Great returns if you bought gold in 2001 or later (and held until now)…but it was a lousy investment for almost twenty years prior to that. If you bought gold at the “fair value” of $460/oz in 1980, you had to wait more than twenty years to see any price appreciation.
So, are we in a “new paradigm” for investment in gold? Are investors finally seeing gold as a hedge against inflation…or a “protector of buying power”? Honestly, I don’t know…only time will tell. Over the past fifty years, the best time to buy gold “long-term” seems to have been when it was significantly undervalued….and even then you likely had to be willing to hold on to it for a very long time (and ride out the tremendous volatility).
I grew up in Argentina in the 60′s, 70′s, 80′s–and for me it’s easy to see the writing on the wall (of course I’ve read it once before, albeit in Spanish). The U.S. Dollar is now in its LAST DAYS as it enters into the spiral of hyperinflation/maxidevaluation. In a matter of 2-3 years, if the dollar even still exists, you’ll be lucky to buy a decent meal for $10,000. The price of gold, in nominal terms, may be in the hundreds of thousands or even millions.
Crystalline gold leaf
I agree, Gold is a great investment for our current time!
Great post!
This is a great post. I will have to forward this to a friend. We were just talking about this sort of thing the other day. Thanks!
Hello,
I found your blog while doing some research and I found it really helpful. I just wanted to thank you for all the great information.
Thanks!
The gold is STILL out there!
Everyone should own some gold!