Thar's Gold In Them StreetTracks GLD ETF Shares
A month or so ago I held my nose and bought gold at $720 an ounce, or rather, I bought the StreetTracks gold tracking ETF GLD at $72 a share. Today GLD topped $82 a share, up 15% from where I bought it. Why in the world would anybody buy gold at $820 an ounce when it can surely be extracted from the earth for less than that, not to mention existing reserves at central banks and in jewelery?
Simple. Everybody in the world now knows that the dollar is a joke and is looking for a safe haven. If it was easy to buy bulk gold and bury it in the back yard, I might be doing that, but the recent housing bubble prevented me from acquiring a back yard or a cellar. The GLD ETF gives me an easy and highly liquid way of moving in and out of gold, though so far, I've mainly stuck with in.
People who buy gold aren't generally stupid, and it's not a popular investment with the automated 401K stock market inflation scheme. Gold is mainly bought by rich individuals and institutions, as a hedge against inflation and monetary uncertainty. Today, the US economy has both, in spades. The big banks who gave anybody and his uncle money in order to pay themselves big bonuses are now being forced to write-down some of their alleged assets. If you think they all came clean with their handfuls of billion recently, you're on a different page than I am.
Inflation, of course, is what this blog is all about. In real estate, it's all about location, location, location. In investing, it's all about inflation, inflation, inflation. The only thing that gives the dollar value is the full faith of the US government that the Federal Reserve will act in such a way to preserve the value of the dollar. But the Fed has a different agenda, as does the government. It's called postponing pain as long as possible. I wouldn't be surprised if they all take happy pills, but the only thing making me happy these days is my investment in GLD. If you don't want to take it from me, give this guy a listen:
Simple. Everybody in the world now knows that the dollar is a joke and is looking for a safe haven. If it was easy to buy bulk gold and bury it in the back yard, I might be doing that, but the recent housing bubble prevented me from acquiring a back yard or a cellar. The GLD ETF gives me an easy and highly liquid way of moving in and out of gold, though so far, I've mainly stuck with in.
People who buy gold aren't generally stupid, and it's not a popular investment with the automated 401K stock market inflation scheme. Gold is mainly bought by rich individuals and institutions, as a hedge against inflation and monetary uncertainty. Today, the US economy has both, in spades. The big banks who gave anybody and his uncle money in order to pay themselves big bonuses are now being forced to write-down some of their alleged assets. If you think they all came clean with their handfuls of billion recently, you're on a different page than I am.
Inflation, of course, is what this blog is all about. In real estate, it's all about location, location, location. In investing, it's all about inflation, inflation, inflation. The only thing that gives the dollar value is the full faith of the US government that the Federal Reserve will act in such a way to preserve the value of the dollar. But the Fed has a different agenda, as does the government. It's called postponing pain as long as possible. I wouldn't be surprised if they all take happy pills, but the only thing making me happy these days is my investment in GLD. If you don't want to take it from me, give this guy a listen:
posted by Morris Rosenthal | 11:54 AM
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