Last fall I wrote a Series of 11 Posts on this Blog collectively titled ‘Gold as an Investment’.  Readers can find those posts in the Blog archives.  I came to a number of conclusions summarized in those post, two of which are:

•    the world changed economically for the U.S. and the rest of the world in 1971 when Bretton Woods was abandoned and the U.S. $ became the world fiat ‘Reserve Currency’.  It was after that time that governments more strongly influenced (if not dictated) inflation rates and, importantly from my perspective, the U.S. began running consistent year/year net trade deficits that escalated throughout the post-1973 period – and have escalated and continue to escalate hugely after 1999; and,

•    that whereas most commentators focus on their view as to the likely increase/decrease in the gold price and see gold as an ‘inflation hedge’, I think the better focus is on gold in the context of its purchasing power in both inflationary and deflationary periods.

I think anyone with an interest in furthering their understanding of gold ought to read an article today titled ‘The day the Dollar died – and the day Gold was reborn’.  While the article does not reach the specific conclusions about gold that I have reached it does provide some history and ‘food for thought’.

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