Gold

Terry Says

That’s a tough question. Gold has always been the safe haven against paper currencies in time of inflation. But it surely hasn’t performed that way this year! That’s likely because despite inflation, the U.S. dollar is the world’s “strongest” currency — Despite our economic woes and huge deficits, money from around the world is running to the safety of the dollar, pushing up its relative value. And rising interest rates from the Fed are also causing the dollar to be more attractve.

When you can earn 4% on a 6-month Treasury bill, it doesn’t make much sense to own gold, which pays no interest. Even gold mining stocks are a better speculation, because at least they pay dividends –and become more attractive when the price of gold does rise.

That said, there is something magical about holding a gold coin. I think everyone should have at least one!