The Case for Gold
Crystalline gold nugget
When the entire fleet is sinking survivors will head for the driest boat. In a sea of sinking currencies, the lifeboat is gold. That is its value, its grace and its historical role. And, it has always come through.
I think we’re in a commodities bull market that still has a ways to play out. The US monetary policy is insane and I can’t imagine it won’t help the yellow metal long term. At this point, it’s not whether I go long stocks or gold, but rather do I stay in cash or hedge against inflation…
In 2008, stocks lost 30-70 percent of their value, while gold increased about 5 percent in US dollars. But equally significant, in a year of record-setting volatility, gold’s volatility was reassuringly low. At its lowest point, gold was only down 14 percent and at its highest it was up 21 percent. Both Goldman Sachs and UBS see gold rising in 2009, and UBS expects investment demand for gold to pull the price of silver and platinum up along with it.Citigroup is calling for gold to rise above $2,000 in 2009.
Gold is definitely a safe haven, may or may not be an inflation hedge. What asset class you can invest in today’s market – not stocks, not bonds, not real estate, not copper or oil – so gold is the only thing left. Gold has withstood the test of time as a store of value and as a means of trade/currency.
Gram Scales
Bankers hate gold Governments hate gold. They hate it because it is and always has been money. In good times, it’s the rich mans idolatry. But in times of insecurity, its every man’s agreed form of real money, for one simple reason. Unlike FIAT currency, it can’t be printed, it has to be mined, at considerable cost. It has been money culturally for thousands of years. The only difference is how many pieces of paper you’re willing to trade it for.
Silver coin
Since 1972 the DOW is up 8.5 times and Gold is up 25 times. Gold quietly preserves wealth through time. Enough said!
Crystalline gold leaf