Alan Hamilton, editor of Zeal Investor, writes that the March 24 gold upleg was due to speculators. Only speculators can cause such huge price upswings.
Chris Johnston, in his June newsletter, did some analysis of gold, US$, and inflation. He found that historically, gold is linked to inflation, not the US$. I e-mailed him the Zeal newsletter, which writes that gold is linked to the US$ in Phase I, but not in Phase II. Now I”m really confused, because both present data (charts) in making their conclusions. Zeal found that in the last gold downleg, there was an 88% probability of it being linked to the rally in the dollar.
I am not a gold bug, nor a gold bear. Still trying to decide how to handle all this.
Where do you recommend getting gold bullion? When gold comes down in price, I would like to put 1% of my assets in gold bullion. The advantage that I see:
1) The government can’t tax you on physical assets you can hide in your house. No capital gains tax on gold.
2) If you have to file for bankruptcy, or someone sues you, or the colleges ask about your assets, your gold is hidden from view.
3) If the terrorists figure out how to destroy our communication system, and there are computer outages/glitches/wipeouts, your bank account data could be temporarily lost or inaccessible. Your gold is not.
I think I’ve been negligent in keeping all my money in electronic accounts: banks, brokerages, mutual funds. I’m being completely dependent on this electronic system to never malfunction. Some cash, some gold in a safe, some food storage in case of earthquake or bird flu (a question of when, not if), is just part of responsible planning for my family.
