Wednesday, June 2, 2010

James Turk: Gold headed to $8,000?

At a wonderful barbeque this past weekend a close (and very successful) friend of mine expressed his puzzlement at investors' fascination with gold recently.  As he pointed out, it has very little intrinsic value.  Well, maybe.

The thing is, as I tried to point out, is that it is very hard to watch your dollars drop in  value for a decade with no end to government spending in sight.  On top of that, we can never know when the Chinese will pull the plug on their treasury holdings, when the euro will implode overnight, or even what events like these would mean for the dollar.

In the words of James Turk at the 2010 World Mining Investment Conference:
". . . but even as the prediction may seem extreme, to some, the sting in the tail is that he does not see these levels in the gold price, or Dow, as suggesting real increases in wealth. Rather, such an increase would serve only as wealth preservation as the purchasing power of most currencies is devalued in a hyper-inflationary environment due to the huge volumes of fiat money being pumped into the market by governments in an attempt to stave off global recession."

And I guess that's really where I'm coming from now.  I don't expect gold or silver to make me rich, but I'd like to preserve some of what I've worked so long and hard to accumulate.


[ad]

No comments:

Post a Comment