Honestly, I don't know exactly how things will play out,
a lot of so-called "liquidity" is on credit,
but I do think gold is solid as a long-term investment. It has
been down for a significant amount of time during the 70-s,
and it still can be down (intermediate-term bear market)
today. It has been off all-time highs for more than a year now.
A recession and a credit contraction would probably do it, make
gold decline, but the printing
response from the Fed to a recession is very predictable.
I think when faced with the possibility of severe credit
contraction, Ben will print hand over fist, so, gold will
zoom. For now, the credit bubble is just bubbling, and I see
no USD crisis either. It's tough to say what gold will do
when the credit bubble pops and liquidity evaporates. Likely
it will go down, at least in some currencies, but maybe not
the dollar. Gold is a scary market, lots of ups and downs.
Always was, always will be. |
