Buying Gold Is 'Essential Insurance' Against Financial Shocks

Source:

"Governments are supplying liquidity into the system and, unless they sterilize it (issue bonds), they are laying the foundations for much higher inflation for years to come. . ."

A respected columnist in the Times has today (February 16th) highlighted a number of reasons why investing in gold is a shrewd strategy, particularly in the current economic climate.

People traditionally buy the yellow metal, which tends to move in the opposite direction to the U.S. dollar, as a store of wealth in tough times.

Now William Rees-Mogg, who has been offering views on the gold price since writing a book on inflation entitled The Reigning Error in 1974, has explained that gold has "real value" for investors.

He wrote in the newspaper: "For longer than the past eight years I have been arguing that investment in gold is an essential insurance against financial shocks. People buy gold when they are nervous about the economy, and they are right to do so because gold is a unique commodity."

Those comments were echoed last week by Ashok Shah, chief investment officer at fund manager London and Capital, who explained that the current deluge of negative economic news is boosting gold.

"Governments are supplying liquidity into the system and, unless they sterilize it (issue bonds), they are laying the foundations for much higher inflation for years to come. . .These are the things gold thrives on," he told Reuters.

Related Articles

Get Our Streetwise Reports Newsletter Free

A valid email address is required to subscribe