Gold is here to stay. Make sure you own some. As I’ve said in the past, I don’t worry too much about the short-term action of gold. And I don’t buy it to make money. I buy it to hedge against the unexpected. It’s an insurance policy for my portfolio if you will.
Is there any insurance for a reckless Federal Reserve the world over?
No one knows exactly how this race to the bottom by Central Banks will end. But it is clear that they don’t have much regard for maintaining the value of their currencies. “It makes a great deal of sense to own gold. Other investors may be finally starting to agree,” Billionaire hedge fund manager Paul Singer wrote in an April 28 letter to clients. “Investors have increasingly started processing the fact that the world’s central bankers are completely focused on debasing their currencies.”
There was a time when I was at Babson where you wouldn’t laugh at the idea of investing your client’s retirement money in T-Bills. Now we’re paying the government, after inflation, to lend them money. Where in the world does that make sense?
It makes sense to the pols in Washington, D.C. and where they go to retire, at Goldman Sachs. Good ‘Ole Goldman came out with an investor note on May 10 revising downward their expectation for gold based on expectations of Fed tightening. The Fed may tighten, but team Yellen will do whatever it takes to make sure their girl wins in November. Make sure you own some gold.