Financial Sense

Gold - big picture perspective

by Gary Tanashian, | April 12, 2010


goldBack in 2006 (and well before), the blogger was touting a simple message of perspectivewith regard to gold. This perspective is rooted in the idea of something of monetary value in a world so obviously off the charts when it comes to sound stewardship of monetary systems.

Here is an updated yearly chart of gold dating back to the inflationary hysterics that were in play when I was a very young man. All throughout the secular bull market we currently enjoy, we who understand value have had to endure hatchet jobs in the media regarding the ancient relic:

"You can't eat gold!" as they say.

Yes, I know; why would anyone want to eat a sound anchor to monetary value in a (mostly) civilized world that still operates on a currency basis? Why would anyone want to eat a heavy metal that will become the surrogate for human monetary and trade interaction including in the things that we can eat; in the things that we do need to survive and prosper? Gold only has all those centuries as a civilized medium of exchange to back it up.

"A deflationary price spiral will bring gold down and end the mania in the yellow metal!" they say.

Oh really? Well, you have been saying that for the majority of those green yearly candles on the right side of the chart. Your continued doubt assures that you will finally be buying a candle well higher than the current one. If we get a deflation, it will be an interim event and guess what? Gold's real price is going to rise during said event, even if its nominal price declines temporarily. Those phases are what smart investors call 'investment opportunity'.

"But, but, but..."

No 'buts' about it, forget your assumptions and gain some perspective.

Copyright © 2010 Gary Tanashian
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