oldgoldbug

Gold Is Still the Opportunity of a Lifetime

When Nixon eliminated the US gold standard, gold was trading at around $40 in the international market. Today, about 35 years later, gold is trading at $990. It has returned a 9.6% compounded annual growth rate. Granted, the returns through 1983 were in the 40% annual range, so there has been a far amount of famine after the "feast". I think the author is making the point that accelerated returns approaching those of the late 70's early 80's are possible given the confluence of: 1 - growing BRIC populations with wealth, 2 - massive currency printing around the world 3 - need to prop up banking systems around the world at who knows what cost. Gold, at these prices, is a reasonable speculation and should be, without question part of a balanced portfolio, and a rather large part (20-35%) at that.
BTW, there is every possibility that the actual rise in gold will be "hidden" if investors start grabbing for every asset they can, including stocks of every type and real estate, with rapidly devaluing dollars.
For you younger readers, back in the 70's Mexico devalued the peso. Car and Driver magazine wrote an article about a Mexican businessman who ordered 3 AMG Mercedes for $100000 each (big bucks in the day). Not long afterward the peso went from 8 to the dollar to 12 to over 100 to who knows. My point is the guy still had his Mercedes and they were worth something. His pesos, on the other hand, weren't worth much.
Can it happen here? Sure, why not. I keep an eye on TLT, the long government bond ETF. It peaked out at 122 when deflation "Armageddon" was only days away, crashed to the high 80's when risk appetites increased, and is now trading 95. Gold and silver going up a lot, bonds going down a lot tells us things not going so good.
Successful investing to all.