It always seems to come back to whether we are in for an inflationary or deflationary blow up. Yes, the BRIC countries have been exporting DEFLATION in LABOR COST that can be offshored, but the lower prices have stimulated consumption, which has resulted in INFLATION in COMMODITIES used to make the overall cheaper goodies. Which is the dominant trend? Well, due to my consumption of basic commodities (gasoline, natural gas, electricity), real goods that cannot be easily offshored (milk, etc.), and, more importantly due labor that cannot be offshored, such as medical care, my cost of living has been going up at nearly ten percent a year. It was the realization a few years back the the Gubmint is lying about inflation that got me first interested in PMs. The nice aspect of $Gold is that it can do well in either an inflationary or deflationary blow. Of course, instead of either extreme, we might just "muddle through" with the PTB sitting on $Gold all the way. In that event, my leveraged miners won't do very well. But I am buying more fizz, not to make money, but to have real money in case of an economic crack up. Yes, it could go down, maybe back to $250 again, over a 50% loss from here. But a stock can go to zero, and $Gold will always have some decent value. If it turns out I don't need it to buy bread and milk someday, then I'll just leave it to the kids. As far as making money, I'm willing to look elsewhere. Maybe more exposure to the uraniums.
NC |
