Monday, 13 January 2003

A golden future?

The Scotsman runs an interesting article today on the prospects for gold:
Ben Bernanke, a recent arrival at the Fed from the academic groves of Princeton, has declared that the Fed will do all within its not inconsiderable powers to "print" its way out of trouble before deflation becomes entrenched.
I know that Mr. Bernanke's recent pronouncements have been causing much speculation across the Internet. The web's goldbugs are aware that:
Now that the Fed has declared it will "print" as many dollars as it takes to combat deflation, holders of US dollar assets would have to be extraordinarily naïve not to realise that an unlimited increase in the supply of US dollars means dollars will inevitably be worth less.
Fans of gold think that:
There is one standard against which this debasement of currencies can be measured and one asset which investors can own to protect themselves: That standard and that asset is gold.
I think that they are correct.