The advantage Precious metal

At this time the world is full of economic and currency of the "sick". As you can see in the chart below gold has increased significantly, which is caused by the loss of purchasing power of various currencies, mainly U.S. dollars. Circulation of money over the last few years does not seem limited, while the gold supply can not be upgraded easily.

As a result of printing more money dipercepatkan, all paper money will be corrected on the gold in 3 to 5 years. Therefore, the U.S. dollar, pound sterling and the euro should be avoided.

In addition, investors also need to remember that the rapid expansion of the deficit during the 1970s coupled with a lack of control inflation, while fiscal discipline in the 1990s produced a period with low inflation pressure (see table below). And may be concluded that inflation is always everywhere a fiscal phenomenon!

 

As noted in Peter Bernholz Monetary Regimes and Inflation, "there has never occurred a hyperinflation in history the which was not the caused by a huge deficit of the state." (never in history been a very high inflation is not caused by a government deficit very large)

So we must be ready to anticipate the rise in inflation in recent years, where the gold will serve as an inflation hedge that is profitable.

Conclusion: I still recommend investors to allocate at least 10% of portfolio in gold and / or silver. Gold has indeed gained more than 400% over the last decade, but as the dollar loses its status as the world's reserve currency, the new gold price will skyrocket tens of percent.

I really would be surprised if gold had not reached U.S. $ 5,000 / toz in the next few years. So whether you want to buy gold, or even "definitely" (by the terrible inflation)?

Hopefully you can take advantage of the weakening U.S. dollar in the future and put the funds in assets that promise!