Here at MoneyWeek magazine, we've liked gold for a long time.
Back in 2001 when we launched, that was a downright contrarian stance.
Gordon Brown had just flogged off most of Britain's gold reserves. Gold and ‘real' assets in general were seen as relics of a bygone era: primitive, uncivilised even.
We didn't need gold any more. We had clever central bankers who knew how to keep the economy running smoothly. With them in charge, managing our interest rates and keeping an eye on our supplies of paper money, we didn't need the artificial restraint of a gold standard.
Gold was shunned: if it had no use as money any more, then what was the point of it? By 2001, the price had fallen to below $300 an ounce, having once—back in 1980—scaled the heights of $800.
Yet now most people would bite your arm off to buy gold at $800 an ounce. Gold is no longer a contrarian bet. It features regularly in the money sections of newspapers. There are ‘we buy your gold' shops everywhere. And more and more funds and financial services companies are setting up to cash in on the boom.
It's not a bubble either. It's still held in contempt by the economic ‘elite'. Apart from the odd dissenting voice buried in the back pages, you'll rarely find a pro-gold story in the FT or The Economist, for example.
But gold's appeal has certainly been rediscovered by the wider investing public. And it's little wonder why. Because those ever-so-clever central bankers screwed up badly. . .View Entire Article
