The news of the House passing the Obama $825 Billion Stimulus Package sent the price of gold over $900 an ounce. This seems to be the trend lately…each month a new higher trading range for gold prices.

Government Spending Driving Inflation Fears

In a Bloomberg article market watchers confirm inflation fears,

“Central banks are going to start printing money and it’s not an ideal place for investors to be,” said Joel Crane, a metals strategist at Deutsche Bank AG in New York. “People don’t have faith in currencies at the moment. There is still an underlying faith that gold will go higher.”

I would consider this a reasonable conclusion as our Fed has never been very good at stepping on the gas or the brake in just the amount necessary. Monetary policy is a rather blunt instrument so this is to be expected.

Devaluation of fiat currencies world wide is gaining ground do to all of this spending and printing. Bloomberg again puts it like this,

Gold will rise in the longer term, “based on a growing distrust of all paper currencies,” said Adrian Day, president of Adrian Day Asset Management in Annapolis, Maryland. “People are turning to the one true money, which can’t be created by governments and holds its value.”

I’m with Mr. Day…I don’t trust currencies including the US dollar right now. So convert your willowing US dollars into physical gold and watch it grow.

Happy Investing!

Investing options are often so vast and confusing, one opts to make no decision over making the wrong decision. This is one of the many reasons I like and recommend owning precious metals as a necessary addition to everyone’s investment matrix. No one can argue the efficacy of that statement.

It’s unambigous…and truthful.

“Every investor should own precious metals”

A bold statement, no doubt…but one I’ll stand by.

The real question is not should physical precious metals be apart of a diversified investment portfolio, but when to go “heavy” on the metals, which metals, whether to use leverage, among others are the more pertinent questions….and where it gets a little confusing once again.

But the base line question…”Are physical precious metals a good investment for me?”…has been answered.

Why Are Precious Metals a Good Investment?

Over the coming weeks, I will write on all these topics and more but suffice it to say…

Physical Precious Metals are Good Investment because..

Can be a hedge against inflation

Can be a hedge against falling dollar

Can be a hedge against falling real estate values

Can never go to “zero” …has intrinsic value

Can be leveraged for greater rate of return

Can be traded long or short so money can be made regardless of market conditions

Can be a better option if stock, bond, real estate, and other markets are too risky

I could go on and on why owning physical gold (not gold futures or other derivatives…I’m talking about the actual gold bullion) or other precious metal is a fantastic option…especially now in our current global financial crisis.

Thanks for stopping by and stay tuned!

Rob K. Blake