Gold is looking better than ever
The last few days have seen volatility return in the global markets with full gusto. And why wouldn't it? After all, the markets received two big jolts. First, Goldman Sachs came under the scanner and then, clouds of debt default intensified over Greece. Of course, it is quite possible that these issues will be resolved and the world will go back to business as usual. These are minor setbacks alright. But they are certainly pointing towards a bigger menace, the like of which we must have never seen in history.
Look at it whichever way you want. But the fact remains that so much sovereign debt is likely to be issued over the next few years that there aren't going to be enough savings in the world to service them. Hence, the Governments would be left with no option but to print currencies. Of course, the Governments have been doing the same all this while. But the magnitude of the forthcoming money printing exercise is going to be so huge that there is a strong chance that there will be hyperinflation some time down the line.
Thus, as the value of money goes down because of its excessive printing, the value of something that is in limited supply and is valued all over the world will certainly go up. And what better commodity to fit this descripttion than gold. The yellow metal has had an excellent run so far this decade but given what lies in store, it is perhaps looking better than ever.
However, as we have said before, make gold only a small part of your portfolio. Agreed that there are strong chances of hyperinflation. But what if hyperinflation does not occur at all. In that case, you may need better options than Gold to boost your purchasing power.
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