Morningstar, a company that specializes in the analysis of Mutual Funds, has come out with an article that is critical of the long term outlook for gold. Please see: Why We See Gold Going Lower Long-Term
When you see companies that specialize in plugging non-gold alternatives, one has to take their advice for what it is; biased.
I commented on that article and you can read it below. Money Magazine, another pro-mutual fund medium, has come out against gold the last two years running. Again…no surprise…
You can read my articles about Money Magazine calling gold a bubble here (2010) and here (2011).
Here is my reply to Morningstar’s article;
So let me get this straight…a company that analyzes mutual funds comes out against gold. What a surprise!
I don’t know where to begin with your flawed analysis, but let me address a couple points you try to make.
As noted by others above, you leave out the fiat currency weakness and government spending/Fed quantitative easing aspect to why one needs to be diversified into gold. You evidently believe that a 2 trillion budget and more than 1 trillion in easing has no consequences.
Secondly, you speculate that Central Banks could start selling again. What pre tell do you think gives the illusion that fiat currency has purchasing power but the gold that is held at Central Banks? If they sell all their gold, then you are left with what? A fiat currency with nothing backing it but the debt of nations.
Here’s some good information for you to consider:
What Really Backs the U.S. Dollar?
The video version: http://www.youtube.com/watch?v=CN6-rzA9goM
If your mutual funds go up 10% and the dollar falls 10%, have you gained any true wealth?
What about the $4 trillion plus of sub-investment grade derivatives the nations top 5 banks hold that are coming due in the next five years? Who will be the counterparty to those transactions but the lender of last resort; the Fed?
In 1929-1933 what was the reason that caused people to rush to the bank and exchange their Federal Reserve Notes for gold?
Why did our money at one time say “Redeemable in gold coin?” What does it say today?
How many years have Federal Reserve Notes been in existence without a relationship to gold? How has that experiment worked out for us citizens?
Get real wealth…gold and silver.
If you haven’t yet invested in gold or silver, download this free report to see what’s really holding you back; 5 Reasons You Haven’t Bought Gold Or Silver
Doug Eberhardt is a 28 year financial services veteran and precious metals broker selling gold and silver at 1% over wholesale cost. Doug has written a book to help investors understand how gold and silver fit into a diversified portfolio, how to buy gold and silver, and what metals to buy. The book; “Buy Gold and Silver Safely” is available by clicking here Contact phone number for Buy Gold and Silver Safely is 888-604-6534
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