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There is an increasingly disorderly currency war going on out there, and the
advantage of gold is clear– they can’t print it, they can’t default on it, and there will always be demand for it. Simply put, in the global currency wars, owning gold is like abandoning the battlefield altogether. Words: 270; Charts; 2
So writes Tim Price, Director of Investment at PFP Wealth Management in the UK, in a guest post* at www.sovereignman.com entitled What Warren Buffet doesn’t understand about investing.
This article is presented compliments of www.munKNEE.com (Your Key to Making Money!) and may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.
Price goes on to say in further heavily edited excerpts;
Many investors are losing faith in gold on the basis that its price in US dollars has recently declined. Context is everything. Express the price of gold in another currency, the Japanese Yen, [see chart below] and gold looks relatively buoyant so it comes down to what sort of money you want – and in an environment of competitive currency devaulation, it’s an important choice to make.
[To decide what sort of money you want]… the chart [below] is used by fund managers at Stratton Street Capital to help assess sovereign credit quality. They suggest, and we [concur], that it also has merit in assessing likely currency movements too.
In a global deleveraging that is likely to persist for some years, the heavily indebted countries (the darker colors in the chart above) will desperately need to attract foreign capital to help service their heavy debt loads and, in order to do so, they will likely devalue their currencies but one currency it doesn’t highlight is gold.
There is an increasingly disorderly currency war going on out there, and the advantage of gold is clear– they can’t print it, they can’t default on it, and there will always be demand for it. Simply put, in the global currency wars, owning gold is like abandoning the battlefield altogether.
Editor’s Note: The author’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.
* http://www.sovereignman.com/finance/what-warren-buffett-doesnt-understand-about-investing-10874/ (Written by: Tim Price; © Copyright 2012 Sovereign Man, All rights reserved )
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