| I happened to be at Ground Zero on December 30th 2001. A bitterly cold, greyish and somewhat scary day to have been visiting the wreck that was the WTC. I can vaguely remember Dow had been busted in September that year was hovering between 8000 and 9000 points. Ten years later, Dow is still hovering in that range, having twice got busted in between. Only one commodity has stood apart: Gold. Yes, it has had it's 10-15 per cent cuts in the last decade but against the US it has tripled. People complain about Gold mavens like me. They can and they must. But I have to ask one question-does money have a value or not? How can the West continue to borrow from Asia at zero per cent and keep spending or building real estate that no one can afford? Unless, borrowings come with a cost, economic splurges of the type the West-US and Europe put together, have carried out would never have happened. Just consider the enormous cost that Asia is paying. Leaving apart, Japan, Israel, Hong Kong, Singapore, Korea and Taiwan not a single nation has per capita GDP of $ 10,000. But all the bankrupt nations of Ireland, Spain, Portugal, UK and Greece have per capita income in excess of $ 30000 per annum. So why should they not pay back what they owe, with double digit interest rates? Or they can pay-off their debt in Gold. Which, fortunately, also rests in Asia. "Gold normally trades like a commodity. However, when investors lose confidence in currencies, because the pool of gold is so much smaller than the pool of currencies, demand for gold can effectively become unlimited". We came across this interesting take on gold in a report published in Financial Times. We are not sure of the demand for gold being 'unlimited'. However, we certainly endorse similar views as the author of this report with regard to the fundamentals of the precious metal. More so, with the crises across global economies and their underlying currencies showing no signs of reprieve. After US and Greece, the Spanish economy is also showing signs of debt crisis. Whatever may be the nature, the impact of the same is set to squarely fall on government finances. Which means that the already indebted governments will print more money! Given this logic, the chances of the US dollar or the euro carrying their weight against gold are slim. We are of the view that the demand for gold is here to stay for a very long time. There may be pullbacks in the asset's price along the way. Some big and some small. But as long as central banks continue to print money, gold will be an important asset class to have in one's portfolio. Like we always mention, please do not go overboard with it. Safe Harbor Statement: Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints. Nothing in this article is, or should be construed as, investment advice. |
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INVESTMENTS IN INDIA
We are low-risk, long-term investors.
Stocks, mutual funds and the entire investment gamut. Only financing/investment avenues in India will be discussed.
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http://in.groups.yahoo.com/group/investwise/
INVESTMENTS IN INDIA
We are low-risk, long-term investors.
Stocks, mutual funds and the entire investment gamut. Only financing/investment avenues in India will be discussed.
For any assistance, questions or improvement ideas, contact investwise-owner@yahoogroups.co.in
****************************************************************
NEW! ==== Check our LINKS and FILES sections for a world of information. REGULARLY UPDATED.
NEW! ==== Check "Tracklist" in Links and Files sections for Investment Ideas.
****************************************************************
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