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Strategies & Market Trends : Commodities - The Coming Bull Market -- Ignore unavailable to you. Want to Upgrade?

To: craig crawford who wrote (910)	11/2/2001 4:12:29 PM
From: craig crawford	Read Replies (1) \| Respond to of 1643

Whatever happened to 'Buy gold'? What was once the ultimate hedge against uncertainty now languishes, despite a world that's more chaotic than ever. Here's why -- and why it never hurts to own some gold. moneycentral.msn.com Throughout much of history, gold has been a place of refuge from financial uncertainty. Many Germans treasured gold during the hyperinflation of the 1920s. During World War II, people fleeing the Nazis used gold coins to pay for help in their escapes. When inflation took off in the late 1970s in the United States, people rushed to buy gold, which soared to more than $850 an ounce in 1980. For many people, gold is portable, virtually indestructible and universal as a store of wealth. Refinance your car. So, now, with uncertainty raging, why hasn’t gold taken off again? The obvious answer: Unlike the 1970s, when inflation hit nearly 13%, the dollar remains the world’s strongest and most sought-after currency in spite of economic slowdown, lower interest rates and even terrorist attacks. Even though the Federal Reserve has pumped billions of dollars in liquidity into the economy, starting last January, we haven’t seen a whiff of inflation. One reason we haven’t seen inflation this year is that much of that newly created money merely offset the trillions of dollars that melted away in the stock market decline of the past 18 months. If you define inflation as a phenomenon of “too much money creation” or “too much money chasing too few goods,” you’re faced with this reality. The world is more awash in goods than in dollars and consumers who are badly shaken by terrorist attacks and anthrax scares. With little fear that the dollar may tumble badly, there’s no reason to turn to gold as a safe haven. Some 30 years ago, when inflation was high, gold's enthusiasts could generate plenty of excitement. And two of the most prominent “gold bugs” of the time, while not roaringly bullish today, still advise keeping a small position in gold stocks. James Dines and Howard Ruff are two legendary names in the world of gold investing. Each made a fortune for himself and his subscribers in the 1970s by predicting soaring gold prices. But when the bull market in stocks erupted in the 1980s, gold was crushed. Each says he led his followers out of the gold market in time to preserve those gains, though some challenge that assertion.