Will greenback keep the yellow metal in vogue?
Gold is all set for a phenomenal streak of appreciation in the coming times
“So, what would I buy?” I like sugar, cotton and I still recommend accumulating gold, which I expect to continue to outperform equities for several years. Central banks around the world have no other option but to print money and this will lead to a further depreciation in the value of
paper money against precious metals. Still, nothing goes up in a straight line and, therefore, investors need to be aware that gold could still correct to around $750 or so. But when we consider the upside potential of gold compared to its downside risk the biggest mistake an investor could make is not to own any gold at all.
In my opinion, the gold bull market will come to an end when Sovereign Wealth Funds - sick and tired of their investments in financial stocks - will finally purchase gold – probably at above $3000 per ounce. It should be very clear that increasingly the US Fed – run by a “money printer” par excellence (since Mr. Bernanke became Fed chairman the price of gold has doubled) - has abandoned targeting inflation when setting its monetary policy and is desperately trying to cure the current credit crisis with the very means that caused the crisis in the first place: excessive monetary and credit growth. Equally, it should be clear that if you increase the supply of paper money while at the same time the supply of precious metals and other commodities, you cannot be increased at the same rate or not at all, the price of paper money – its value - declines relative to the asset where the supply is limited. Hence, the dollar declines versus gold and other commodities and this is likely to continue for as long as the US tries to bail out the system with monetary and fiscal measures.Continue..
Source : IIPM Editorial, 2008
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
Read these article :-
paper money against precious metals. Still, nothing goes up in a straight line and, therefore, investors need to be aware that gold could still correct to around $750 or so. But when we consider the upside potential of gold compared to its downside risk the biggest mistake an investor could make is not to own any gold at all.In my opinion, the gold bull market will come to an end when Sovereign Wealth Funds - sick and tired of their investments in financial stocks - will finally purchase gold – probably at above $3000 per ounce. It should be very clear that increasingly the US Fed – run by a “money printer” par excellence (since Mr. Bernanke became Fed chairman the price of gold has doubled) - has abandoned targeting inflation when setting its monetary policy and is desperately trying to cure the current credit crisis with the very means that caused the crisis in the first place: excessive monetary and credit growth. Equally, it should be clear that if you increase the supply of paper money while at the same time the supply of precious metals and other commodities, you cannot be increased at the same rate or not at all, the price of paper money – its value - declines relative to the asset where the supply is limited. Hence, the dollar declines versus gold and other commodities and this is likely to continue for as long as the US tries to bail out the system with monetary and fiscal measures.Continue..
Source : IIPM Editorial, 2008
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
Read these article :-
Labels: ARINDAM CHAUDHURI, IIPM, RAJITA CHOUDHRI, TOP MBA AND BBA INSTITUTE IN INDIA
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