Gold Bullion: Advancing in All Currencies
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The gold price is not only making headway in US dollar terms, but also in most major (and minor) currencies as illustrated by the table and graph below. Bullion veterans will recognize this phenomenon as a manifestation of solid investment demand (and a vote of no confidence in fiat paper per se).
The picture and the numbers tell the full story.
(Click to enlarge)
Illustrating the message even more vividly is the chart below of gold expressed in a basket of emerging-market currencies by dividing the dollar bullion price by the Wisdom Tree Dreyfus Emerging Currency ETF (CEW). Also note that the chart has again climbed back to above its 50-day moving average line.
(Click to enlarge)
I remain bullish on gold in the medium term, especially as I believe the vast money printing by central banks could set off strong inflation pressures down the road. I will not be surprised to see bullion remaining in a secular uptrend for some time to come. Add bullion to your portfolios but, given the notorious volatility of the metal, only do so on pullbacks.
Disclosure: No positions
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If you own ETFs, and think that you now own gold bullion? YOU DO NOT. What you own is a paper promise. Do you honestly think that all these paper gold financial products actually sit on a vault of gold bullion? Enough to redeem all the paper promises that they have sold?
Protect your wealth. Buy gold bullion and hold it yourself outside the system. Do not get caught in the crowds, clamouring to redeem their pieces of paper for what is there. Empty promises.
Of course, having it in your possession is better, but PHYS is better than many other paper vehicles out there.
As long as the world's most powerful bureaucrats continue to debase the paper currencies then the wealth protection power of "money that must be mined" will continue to prove itself to concerned citizens around the world who love capital preservation more than gambling.
Buy gold and silver.
An investment can simply be the assurance that your family's wealth has not disappeared due to a tidal wave of inflation.
Investment : the action of putting money into financial schemes, shares, or property with the expectation of achieving a profit. --Oxford English Dictionary
Assurance : an insurance policy under whose terms a payment is guaranteed, either after a fixed term or on the death of the insured person. --- ibid.
May 18, 2007 an INVESTMENT in one AIG share cost $1440
March 5, 2010 AIG trades at $28.08
-----
May 18, 2007 an INVESTMENT in one Citigroup share cost $55.00
March 5, 2010 Citigroup trades at $3.50
-----
June 15, 2007 an INVESTMENT in one Fannie Mae share cost $68.75
March 5, 2010 Fannie Mae trades at $1.01
Now check out these "numbers" for that non-investment of gold:
$657.80 per ounce on May 17, 2007
$1139.60 per ounce on March 5, 2010
...
So...yeahhhh...gold certainly isn't an "investment", huh?
How do you like those numbers?
In fact, on April 12, 2001 I purchased some gold wafers for
$26, 520 and buried it. Present value $113,960.00 as of March 5, 2010.
On August 25, 2007 I sold ALL of my financial stocks and gradually bought up oil company stocks until late February, 2008 and 2/3 out by the end of June, 2008.
Current investments in US stocks : ZERO
Yes, I love numbers especially if preceded by a $ sign.