In case you are unaware of why investors want to own gold, here are some prominent ones:
Gold:
- responds to its own supply and demand
- protects against short-sighted government actions and interventions
- is a bellwether of market sentiment and economic outlook
- protects against currency devaluation and inflation
- is global
- is one of the most beautiful metals ever found in the earth’s crust
- is a store of value
- is timeless
- is money
But if that were not enough, those timeless reasons are now added to by the following:
1. For the first time ever, China has invested in GLD, the gold exchange-traded fund. Their sovereign wealth fund, China Investment Corporation, recently invested $155 million in the ETF. The amount represents only .05% of the sovereign funds’ $300 billion, meaning there’s a lot more where that came from.
2. The Prime Minister’s Office in India is creating a stream-lined process so that the country’s state-owned corporations can “aggressively pursue the acquisition of strategic mineral resources.” The Indian government, normally known for thick-layered bureaucracy, has created a centralized body that will have “rapid strategic and decision making powers.” This is telling, both from the perspective that they see some urgency to the matter, and that the acquisition targets are minerals.
3. “Iran is now a nuclear state,” declared President Ahmadinejad last week. The Islamic republic has produced its first batch of high-level enriched uranium, which they claim is solely for electricity purposes but can also be used to create material for atomic weapons if enriched to 90%. In response, the U.S. imposed new sanctions, and the U.N. is considering adding more of its own sanctions, too.
(That one’s got to have you feeling warm and fuzzy now, doesn’t it?)
4. The U.S. government must inflate. Here’s another reason we think that sooner or later inflation trumps deflation… by 2020, government economists project that entitlement benefits (Social Security, Medicare, etc.), along with interest payments on the national debt, will devour 80% of all federal revenues.
There just is no other way around it. How is Uncle Sam going to come up with $100+ TRILLION dollars any time soon? That’s what the U.S. is going to need in the lifetimes not of our children and grand-children, but OUR lifetimes. Trillion dollar deficits? Come on.
We now have been fighting in Afghanistan longer than the Soviet Union. With about as much success.
Politicians are leaving Congress by the car-load (and taking their leftover campaign money with them).
Owning gold should be a cornerstone investment in everyone’s portfolio. But, is now a good time to buy? Check out the four “clues” we outline in the new issue of Casey’s Gold & Resource Report here, risk free…
