There are about three hundred economists in the world who are against gold, and they think that gold is a barbarous relic — and they might be right. Unfortunately, there are three billion inhabitants of the world who believe in gold. — Janos Fekete (1912- )
First of all, we would amend the quotation above to suggest that it is not unfortunate that three billion or so people believe in gold. On the contrary, the believers counterbalance the excesses of governments which periodically crank up production of paper money to fund their pipe dreams. An inordinate rise in the money supply inevitably leads to inflation.
Second, we also hope the three billion-plus believers in gold would believe just a bit more fervently right now and thus push the price of gold up around the US$400 mark.
Since hitting US$395 per oz. early in the new year, gold drifted gently down to about US$370. This caused more than a little anxiety, as it appeared the gold rally born early last year had succumbed to a premature old age. But over the past few weeks, gold rallied and now trades at about US$385. We’re cheering for $400 gold. Keep your fingers crossed.
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