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Surprise gold advocates
Two former central bank leaders speak out on gold's role in the investment portfolio
Mervyn King, former Governor of the Bank of England
World Gold Council's Gold Investor magazine
“If we don’t quite know what the future holds, there is little point in getting carried away by very fancy mathematical calculations of optimal portfolios. Don’t rely on past data to be a good guide. Try to think through what mix of assets gives you the best chance of surviving some big event. That must mean including assets that are negatively correlated or uncorrelated in your portfolio.
And I am very struck by the fact that over many many years, central banks, governments and individuals have always, despite the protestations of economists, held some gold in their portfolio. Obviously, there is no high running return, but when unexpected things happen, particularly when governments rise and fall, then gold is a means of payment that everyone is always prepared to accept. And I think that’s why even central banks have always had a role in their portfolios for gold."
Alan Greenspan, former Chairman of the Federal Reserve,
Foreign Affairs magazine and in a speech before Council on Foreign Relations
"If, in the words of the British economist John Maynard Keynes gold were a 'barbarous relic,' central banks around the world would not have so much of an asset whose rate of return, including storage costs, is negative. . .Gold has special properties that no other currency, with the possible exception of silver, can claim. . ."
"Gold is a good place to put money these days given its value as a currency outside of the policies conducted by governments."