I am sick and tired of the entire one sided analysis of gold by the main stream. The article in Sunday’s Minneapolis newspaper that my father wrote about in today’s letter is a prime example.
Equally frustrating, nowadays most financial advisors will tell you something like “gold is overbought, and gold pays you no interest” or “gold is a bubble that is in the process of topping out.”
The question then becomes, why does gold continue to march higher? Is it because of the wars in Iraq and Afghanistan? Is it because Iran is a problem that must somehow be dealt with? Is it because central banks are now purchasing gold, or that gold production is decreasing? Is it because rampant inflation is in our future?
All of those answers make sense, but really none of them matters much to me. You see, I consider gold as an asset that I will own no matter what. An asset I hope I never need to use, an asset that I can privately pass it on to my three children.
That is why gold’s short or intermediate trends do not concern me. I have grown to learn that what happens today or tomorrow with gold’s price is irrelevant. Because I know that for thousands of years gold has possessed real purchasing power, and when the dollar ultimately turns into a worthless piece of paper, people will seek the protection of gold. It’s as basic as that.
When it comes to gold, I’m only interested in one thing – how many ounces do I own. And I will continue to get longer gold, my hope is you will too!
(David’s comment: The apple doesn’t fall far from the tree. Andy has listened and learned his lessons well!)