Gold: Why Do You Own It?

Gold: Why Do You Own It?

A Seeking Alpha Contribution


  • The total supply of money and credit has not grown much since 2008, leading to low inflation.
  • Credit growth is finally recovering to pre-2008 levels, the first solid sign that inflation may be coming.
  • The U.S. dollar is strong, but mainly because foreign currencies are weak.
  • Gold as a trade looks bearish, but the fundamental case for holding gold as insurance remains.

Gold is sliding because there’s no inflation and the U.S. dollar is getting stronger. It could break its 2013 lows and unleash technical selling that sends it sharply lower. As a trade, the bears are salivating at the near-term outlook, but is the fundamental outlook deteriorating?

No Inflation

First of all, gold is not an inflation hedge or a deflation hedge. Gold is a crisis hedge. Gold performs best when deflation is so bad that banks fail and savings are lost in the process ((see Cyprus). Gold bars preserve their value. Gold also outperforms when people are running away from paper currencies…..To finish reading, please Click Here.

*Please note, this article was written and published as a contribution for Seeking Alpha. To finish reading the article you will be redirected to their site.



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