THINKING AHEAD

Thinking Ahead

"Gold is money and nothing else."

JP Morgan - American Banker - 1921

 

Gold is rapidly re-establishing its true historic monetary role, as gold becomes the asset of choice for an increasing number of investors.

Gold has been in a robust bull market run for eleven years. Despite gold prices rising from a low of $250 at the end of the 1990's to over $1800 recently, mine production has been essentially stagnant. A reminder of the 1970's, when gold rose from $35 per ounce to $850.

 

Gold remains underpriced when judged in relation to the excess amount of money and credit that has been created over past decades, and when compared to the price relative to other commodities.

 

For example, gold would have to rise almost five-fold to reach levels achieved at the end of the 1970's. In addition if gold had kept up pace with the reported rate of US inflation, it should presently be trading in excess of $2400 per oz.

Bars Coins Money

Gold is indestructible, possesses a high value-to-weight ratio (convenient for storage and transport), depends on no one else's liability (no counterparty risk), and has provided wealth protection for centuries, and nowadays is considered as a core element in the Best-structured Asset Protection Plan.

 

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