Costard

Gold - Not the Safe Haven People Think it Is

IMO history gives no clues about our current situation, as we have not only a credit crisis but a burgeoning currency crisis. Debt levels are unprecedented and counterparty risk has mutated to the extent that no government backlining is possible - since governments are the counterparties at greatest risk looking forward. Price-fixing of gold during previous depressions cuts two ways... we really have no way of knowing which way gold would have run if it wasn't federally controlled; however governmental meddling usually leads to supply gluts and lower prices (see agricultural commodities in the 1930's).

Precious metals have every potential of holding strong because they hold no risk of default. I say potential, and I think the gold bugs are generally overconfident and for poor reasons. But it's neither clever nor wise to ignore fundamentals, which are in this case, a world bloated with endemic risk.