This is for you, brother Dick, and anyone else that may think gold is getting a little too expensive to purchase. With the price of gold hitting $503 today, I believe it's important to put things into perspective and before anyone starts thinking that the gold train has left the station and it's too late to get on board, here's a piece that presents the bigger picture. From the link:
"The $500 level was a psychological point and we broke through that," said Emanuel Balarie, senior market strategist at Wisdom Financial Inc. "With gold still rising today, I think we are going to crack $600 sometime in 2006."
Balarie felt that one reason gold had room to rise further was that bullion's high of $850, touched in 1980, after being adjusted for inflation today, would be now worth around $2,150 in current dollars.
"Gold is still very cheap when you look at it in that perspective," he said.
Oh, wait a minute, the dollar in real terms has lost it's purchasing power since 1980 such that $850 then represents $2,150 today? You only have the Federal Reserve that prints the money and the Congress who spends it to thank for that.
While all of this demonstrates the erosion effect of inflation in terms of your wealth, it also communicates the need to defend against it.
Get gold while it's still a bargain.
