Global commodities investor Jim Rogers says gold’s rally and record prices are a sign that money printing is starting again and the gold bull run is far from over.
Rogers believes we have years to go on gold (and other commodities) before there is the parabolic rise that signals a bubble.
Thanks Monty. In an earlier post you showed that oil has gone up against the dollar, while remaining stable against gold. I draw two lessons: (1) As a commodity, oil, though itself also subject to the law of supply and demand, will also rise against an inflated currency; (2) We should really characterize Rogers et al. (e.g., Pelerin) as being “bearish on the dollar” rather than “bullish on gold”, for the dollar is losing its value against many things, not just gold. In the case of Rogers it applies because he has recommended not only gold, but commodities in general. My thoughts arise from the concern that gold isn’t so much an investment as it is the best store of value. Today, the holder of gold doesn’t have an “investment” that earns a return, but rather, real money which is free from the robbery caused by the weakening of the currency. If one could buy gold and deposit it in a real-money bank and get interest, then it would become an investment. For now, it is perhaps best understood as a vehicle for preserving capital.
Then if gold is only a means of preserving capital and not an “investment”, we see that the situation is really dire in the USA. For there are many who are recommending that gold is about the only good investment out there, and that means that wealth will be transferred from the fiat currency into storage, and it will no longer be in the economy creating jobs (except in the mining sector of course!) and contributing to the GDP.
P. W.,
I believe you have it exactly right. The dollar and all fiat currencies are returning to what Voltaire described as their intrinsic value — zero.
No fiat currency in the history of the world has not failed, given enough time.