Quote:
Originally Posted by Anand04
Why invest in commodities? Two and a half billion people are going to live like Americans in the next 20 years and prices go up over time, that’s the nature of inflation.
We are in the middle of a global economic crisis and commodities are on sale. Buy commodities now while they are still cheap. When we finally emerge from this global economic crisis -- prices will explode higher. I’m talking about another long-term bull market in commodities. Let me explain…
Inflation Will Push Commodities Prices Higher
Federal Reserve Chairman Ben Bernanke is an inflationist, which is an advocate of the policy of deliberate inflation achieved by increasing the supply of available currency and credit. They call him helicopter Ben because he once quoted a statement made by Milton Friedman, about using a "helicopter drop" of money into the economy to fight deflation.
Bernanke is a student of the causes of the Great Depression, and he has written extensively on this subject. Bernanke knows that deflation is quite negative for an economy and should be avoided at all costs. We have recently seen deflation as prices for real estate and commodities dropped during this recession. But, Ben Bernanke’s Fed and other central banks around the world have fired up the printing presses to combat deflation. They have been dumping new currency into the economy to reverse deflation and stimulate the economy. It’s working! One measure of inflation- the Consumer Price Index (CPI) has recently turned positive. Deflation is out—Inflation is starting.
The problem is, inflation could really skyrocket, especially when we finally emerge from this recession. Inflation eats away at your purchasing power and takes away your wealth.
One of the best ways to protect against inflation is to invest in commodities.
In the 1970s, when inflation in the U.S. was high and the economy was in a deep recession, commodity prices soared.
You want to own tangible assets like metals, energy, agriculture, and livestock as these commodities hold their value in inflationary times
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Hi,
Investing in gold is my top priority now. I don't know which should i use. ETFs, bullion - physical or stored, futures, or even spot gold.
Silver is also another metal i'm eying because it's very like gold - properties and so on. One thing to bear in mind is the commissions they charge if i buy gold any gold. Here in singapore, i need to pay tax of 7% of the (price X Quantity) of the gold i buy (physical gold bullion). Tax is 7% that means if i buy about 3kSGD of gold, thats almost 300SGD out from my pockets. Its really seems uneasy to buy gold at such a "high" price. Every thing including price is relative... so at an all time high, it doesn';t seem right to buy now. Rhen again if i wait for a correction-that miht or might not happen, i risk missing out more.
The main purpose of investing in gold is not to profit from capital gains but to protect against inflation. A well constructed portfolio will easily weather through inflationary phases that will come like a fire storm and eat away wealth.
What's your take on this?
Forexer