Why Invest In Gold?
10 fundamental reasons to own gold
- Gold remains ultimate form of payment - No counter party risk
- Currency debasement - US Dollar losing status as world reserve currency
- Gold crawling back into the monetary system
- Negative real rates
- Falling gold supply vs increased investment demand
- Gold & Historic averages - gold should be trading above $2500 these days
- DOW/GOLD ratio points to $5.000+ gold before 2015
- Gold & US public debt - gold prices required to counter balance all US public debt held in foreign hands exceed the $10.000 mark
- Large short positions - half of all central bank's gold has been leased into the market. (about 15.000 tons). Covering these short positions is not possible without catapulting gold prices to unimaginable highs.
- Gold acting as safe haven in times of rising geopolitical tensions
Gold & Historic averages
Gold should be trading above $2500 these days in order to clock new 'real' highs
When experts claim gold to be trading in record high territories these days they always refer to gold's 1980 peak of $850. Now comparing current gold prices of $1000 with the old $850 high of 1980 doesn't make much sense since even a chimpanzee can understand that one single dollar represented more purchasing power in 1980 than it does today.
So in order to calculate 'real' highs one has to adjust for inflation. When we take the 'official' inflation statistics then we'll see that the 1980 peak of $850 equals $2500+ today. When we take into account however the more realistic inflation statistics published by John Williams at
www.shadowstats.com then gold should clock $7000+ these days in order to reach new 'real' highs.
Sure enough one could argue that the official numbers are calculated by our government through honest and correct methodologies but by conveniently taking out those items causing the highest inflation numbers (food and energy) since the early nineties you can fool most of the people but not for an indefinite period of time.
The chart below is being calculated based upon 'official' inflation numbers and as you can see gold is nowhere trading near new 'real' highs these days. In order to do so gold should be trading at $2500+