Monday, May 17, 2010

Cautionary Article About Gold Investing At Suite101.Com

Cautiuonary, not skeptical. Recent gold prices have called up a lot of skittishness, including at Suite101.com:
Gold and silver seem to be all the rage lately. Many investors, however, are skeptical about it because they fear that they may be getting in at the height of the bubble....

The reason gold and silver are going strong is not only because people still want it for diversity and security in their portfolios, but because it is measured against a nation's currency.

As a bank like the US Federal Reserve uses its printing press for dollars the same as the Wall Street Journal does for newspapers, the supply of currency creates a weakening dollar that is accurately measured in the prices of commodities like gold and silver.

So long as there is no regulation or audit of the Central Bank, gold and silver should continue to do very well against the US dollar, which looks like a strong possibility since the US Senate recently voted against seeking transparency via audit of the Fed.
The article also points out that the rich [with the notable exceptions of Paulson, Einhorn, Soros, and at least one other] seem to be buying distressed real estate; Warren Buffet is buying stricken financial companies.

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