by Michael J. Kosares
1. Don’t buy it because you need to make money; buy it because you need to protect the money you already have.
2. Don’t look at price as a barrier; look at it as an incentive.
3. Don’t buy its paper pretenders; buy the real thing in the form of coins and bullion.
4. Don’t fall prey to glitzy TV ads; do your due diligence instead.
5. Don’t allow naysayers to divert your interest; allow yourself the right to protect your interests as you see fit.
Mr. Kosares is the author of The ABCs of Gold Investing – How To Protect and Build Your Wealth with Gold, the widely-read introduction to gold ownership.
Gold-Eagle – by John Ing – 21 December 2016
The dilemma is that US reserves of gold are relatively small to its monetary base, thus a price over $10,000 an ounce would be needed to reintroduce a gold standard (a far cry from $32 an ounce). While the adoption of a gold standard is unthinkable, so was Mr. Trump’s election. While we would not bet on a gold standard returning soon, America’s deficits will not disappear unless they renege or debase the dollar further. If not, America will continue to print money, either for Trumponomics or to stave off default. The fear of widespread currency debasement and the consequential inflation could create the condition for another run. After all, the animal spirits are back. We would bet then that the potential for a golden solution is in sight and that the current gold price is not too far away from a bottom, particularly when so much fear stalks the world. We thus remain bullish on gold believing that it will reach $2,200 an ounce within 18 months.
JK Comment: A very comprehensive discussion of the current macroeconomic picture, and what we might really expect under Trump’s presidency…along with a very bullish outlook for gold. A good read….
Fortune – 10 November 2016
“With higher prospects for reflation, we continue to prefer being short bonds rather than long equities, as equity valuations remain elevated and the pick-up in growth has been too tepid so far,” the team wrote. “Also, bonds have not helped to hedge intraday equity drawdowns and broad risk-off; we think their ability to do so will likely continue to be limited compared to previous drawdown cycles. As a result, we continue to like gold as a hedge in the portfolio context; it has hedged risk well today, being up more than 5% at one point.”
JK Comment: Current moves in gold appear to reflect a superficial read on market expectations, failing to factor in the long term inflation implications of expected policies. Per MK’s post below, this may very well prove to be a situation where ‘cooler heads prevail’.