The simple answer is that the market, over thousands of years, has chosen gold as real currency. This is no different today as Merrill Lynch reports its richest clients are hording gold bars in fear of the collapsing economy.
This a gem of a quote from the article:
Merrill predicted that gold would soon blast through its all time-high of $1,030 an ounce, and would hit $1,150 by June.
The metal should do well whatever happens. If deflation sets in and rocks the economic system it will serve as a safe-haven, but if massive monetary stimulus gains traction and sets off inflation once again it will also come into its own as a store of value.
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