“Gold is not a financial asset to be compared with dot-com stocks or Miami condos and it is not a commodity like pork bellies or crude oil. It is the ultimate currency for the truly sophisticated wealth holder in a time of substantial unreserved credit promotion.” – Paul Brodsky (Fund Manager)
The recent correction in gold has once again led to financial commentators warning of a bubble – just as they have incessantly since it first passed US $400 an ounce. A bubble usually ends with day after day of speculative higher highs, not corrections like we have just seen or as we saw in August where a $200 fall was followed by the resumption of its decade long rise. That gold continues to climb a wall of worry, and that so many are even calling it a bubble, is actually an extremely bullish indicator since financial bubbles burst only after sustained periods of exuberance. We are far from the days when people lined up for blocks each day to buy gold, as they did in Toronto in 1980.
A simple rebuttal, however, is never enough when discussing gold. It will continue to be subjected to the most aggressive “perception management” assault of any asset class, because it is a direct challenge to all the world’s fiat currencies. Since no paper currency is convertible to gold at this time, this is some challenge.
The warnings of bubbles and the many other reasons for not owning gold will continue unabated as gold persists to $10,000 an ounce, or higher. An independent study of the underlying causes of gold’s rising price, in my opinion, is the best way to gain sufbyficient confidence to buy and hold gold long enough to protect one’s wealth through the turbulent years ahead.
This is the premise of my upcoming book, $10,000 Gold – Why it will get there sooner than you may expect. In this article, we will look at three of the most significant reasons why gold is not in a bubble and it may continue rising in value for years to come.
• The loss of purchasing power of global currencies
• The inflationary effects of money creation
• Irreversible trends that will continue to cause gold to rise
Read the original article HERE.