Gold - An ultimate investment vehicle ?

 

The local "experts" have been parrot-ing their foreign counterparts in hyping how you should invest in gold as the ultimate hedging tool. I can tell you this straight :- they have not being doing their home works or they are just plainly want to intentionally mislead you. Looking at the following charts will tell you the real picture of gold as an investment.

Adjusted for Inflation, Gold is nowhere near its all time peak — in real terms, its only about half its prior highs.

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You should be aware that these are nominal, not real highs.

In terms of 1801 purchasing power -- i.e., adjusted for inflation -- $1.00 worth of 1801 gold was then at $1.45. That was still far below gold's 1980 nominal peak, when it reached $4.26 adjusted for inflation.

So next time when your bankers approach you trying to push their gold related products, you should feel absolutely no remorse to shaft down their throat by telling them they do not know what they are talking about.

As a chartist, I seldom need to know the reasons for the market's ups or downs. But if you insist, maybe the reason for gold's recent surgesare due to collective actions by an informal alliance of public- and private-sector actors, trying to sustain a financial bubble.