fxtrader07

Is it Finally Time to Sell Gold and Related Mining Stocks?

only clueless morons think that an inevitable slowdown in rate-cuts will mean less debasing of the dollar. hundreds of billions of capital injections, implied guarantees for gses, "tax rebates", unfunded future healthcare and pension obligations, bank-bailouts and junk mortgage-securities purchases will ensure that the dollar's purchasing power will go down the toilet going forward even faster than during the past years. It's more than ever before "inflate-or-die" for the govt and the fed (until the whole house of cards comes crashing down anyway, despite asnd because of all inflationary efforts). The problem with gold as the ultimate hedge is that it is sort of a digital investment. the moment the masses really get the fact that the fed and the govt have delibereately inflated their way out of current problems and will always do so (because no other choices exist anymore other than outright seizure of all assets from amrican and foreign citizen) the very moment they will all rush towards gold and silver. However, there is so little gold and silver available that at that point you won't be able to buy it in any meaningful quantities at any reasonable price. Until then, however, the price of gold will probably languish - going steeply up for a few years only to struggle for the next ones. And in all ikelihood, until that final day of reckoning occures, gold will underperform most financial assets.
So if you think you are the smartest of them all, you might hold stocks and bonds and switch into gold right on the eve of judgement day.
I for my part, certainly would not take the chance...
Keep a part of your wealth (at least 10%, better 20-30%) in physical gold and silver and put the rest into financial assets like high quality stocks and bonds (avoid us treasuries and most other govt bonds however!). and do not measure the appropriateness of your gold holdings by their performance versus stocks or bonds. keep in mind that they are an insurance - to be kept for the day that will come with ultra high probability but which will be impossible to time