Be Careful When Buying Gold

                

As with other financial investments, folks learn from experience, often costly to them.

                                   

Gold investors have learned that the price can drop even when there is inflation that promises to become rampant, and the U.S. dollar buys less. Even when the European economies are failing and the American system is closely following a similar disastrous budget- deficit path.

                       

Obviously, all those reasons for buying gold have not always worked for investors. Even with often clueless Federal Reserve action.

                       

The truth is, gold has never been an inflation hedge, only a bulwark against a cheapening dollar. The latter can get stronger, however, compared to other currencies. Such as the Euro. Or the Indian Rupee. (India is a big factor in gold purchases.) At which time the dollar can get stronger (as it’s now) and gold can be cyclically cheaper. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)