Insurance against both inflation & deflation

Already surging by 30% in 2009 to a total valuation of $38 billion, Gold ETFs are clearly attracting significant new allocations from mainstream pension and mutual funds. Yet the metal remains "institutionally under-owned" according to James Montier, London strategist for Societe Generale. Pointing to conflicting signals about whether the global economy now faces inflation or deflation, Montier recommends gold as "insurance" against both outcomes. Because while "gold is the one currency that can't be debased" by inflationary policy, "a significant prolonged deflation would see what's left of our financial system likely to collapse. Holding a money substitute isn't such a bad idea against this cataclysmic outcome."

at 5/21/2009 Labels: ,

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