Tuesday, August 23, 2011

Gold $3,000?

Aug. 23, 2011, 12:00 a.m. EDT

By Brett Arends, MarketWatch

Meanwhile, it still confronts a giant wall of skepticism. I hadn’t realized just how much skepticism was out there until I went on leave. During the summer’s financial crisis, pretty much every mainstream personal finance expert I saw on TV parroted the same line: “Gold is over,” “It’s too late to get into gold,” “Don’t buy gold at these levels,” and so on.
Hardly anybody owns gold. The assets of the Gold Trust ETF are still trivial compared to the trillions held in equities and bonds. Four times as much money is held in Apple (NASDAQ:AAPL) stock alone as in the entire GLD.
At a recent conference of about 40 investment commentators and gurus, I asked how many people in the room actually owned any gold in their portfolios. Just two of us raised their hands.
Very few mutual funds own gold. Even most “precious metals” funds only touch mining stocks, not the metal. Your typical “balanced fund” or “asset allocation” fund has no gold. If you want to have, say, 5% of your portfolio in precious metals you need to add it yourself.   LINK...
"Gold is money. Everything else is credit."         J.P. Morgan

Many still don't get-it!
Gold cannot be in a bubble because it's pure honest money. It cannot be inflated beyond reasonable accounts because it's finite. Sure you can create paper that represents gold like ETF's, certificates and mutual funds etc. But physical gold bullion is NOT a paper asset and cannot be created at will. The supply of gold IS what it IS, it cannot be expanded beyond it's physical domain. Gold is like land, there is only so much available on this earth and that's it, no more! You can't say land is in a "bubble?" The bubble is in fiat currencies, especially the USD. This is where the expansion is taking place, not in gold. Gold is just a rare, beautiful, fungible and shiny piece of metal that has historically been used as a medium of exchange, or MONEY. It is not an investment, it is a reserve. So it doesn't make sense to compare gold to other investments. As for the value of gold, that no one seems to know what it's worth; WATCH THIS VIDEO...LINK