As the Chief Investment Strategist for an investment research firm, I’m frequently asked two questions about gold:
1) Can gold really keep going up in price?2) What’s the best way to invest in gold today?
As to the first question, I’d like to remind you that gold is money. It’s been used as money for thousands of years and not for reasons of tradition, vanity, superstition or even policy - but simply because it exhibits the unique qualities that mankind seeks in money as a medium of exchange and store of value.
To quote former Fed Chairman Alan Greenspan, gold is “durable, portable, homogeneous, divisible...” and so it makes an excellent store of value. Even Mr. Greenspan knows that gold is money!
This notion might be foreign to most people today - but gold is particularly good as a medium of exchange and store of value, in much the same way that aluminum is particularly good as a building material for aircraft, or cattle are particularly suited for eating.
So whenever someone asks me, “can gold keep going up in price” the answer is yes, as long as it’s priced in currencies that have no relationship with tangible assets in the real world. Today, the world’s governments are engaging in a suicide-pact of debt policy. There’s literally no problem that they think can be solved without large influxes of fiat currency. Debt is their policy, and they’re resolute in their belief that it will eventually “work” to fix any number of real problems in the world. They believe in this policy so fervently that they’re willing to devalue their currencies—relative to one another and to gold—to no end.
So yes, gold will rise for the simple reason that it’s priced in an abstract commodity known as “currency” that has no basis in reality.
Given this inevitability, and the propensity of stocks related to gold to multiply gains made in gold’s price, it’s vital to give your investment portfolio exposure to relevant securities. Read the analysis in this PDF very carefully. The three investments that I’ve selected offer a wellrounded strategy for taking advantage of gold’s continued climb.
Ian WyattChief Investment StrategistWyatt Investment Research