“Depending on how bad a crisis gets, gold ranges from being between the best answer and the only answer.�
Inflation is on everyone’s lips these days…everyone in Asia, that is. Because Fed Chairman, Ben Bernanke is so busy pumping up the US money supply to battle a perceived deflationary threat here at home, he is putting pressure on overseas economies to print money at the same pace, in order to prevent their currencies from appreciating against the dollar and, thereby, become less “competitive.â€� The mechanics of all this are a bit complicated, but suffice it to say that the US is “exporting inflation.â€�
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New Year’s Resolutions and Predictions
The New Year invites guesses about the year ahead. I thought I wouldn’t bother this year, but then I found myself scribbling out some investment resolutions and predictions on a napkin over breakfast. Here are some of them:
1. Ignore the “gold is in a bubble crowd.� The mainstream press doesn’t understand gold. They look at the price and think it’s expensive. Instead, they should turn it around and question the value of the dollar. Gold is best thought of as a play on the creditworthiness of paper money. When people worry about the printing presses, gold does well. As most governments have huge deficits to finance, gold shouldn’t collapse.
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