WHY BELIEVE IN A STRONG FUTURE FOR GOLD?
If I had to highlight just one singular reference that supports my belief in a strong Gold market going forward it would have to be the concept of Monetary Inflation. Both the property and share markets have been the major beneficiaries of this inflation over the past 25 years. Whilst core inflation has remained low, there has been no pressure to raise interest rates, thus allowing the party to continue. In recent years however, this has predictably changed and core inflation has started to show its ugly face, effectively gate crashing the party. Central banks around the world have no choice but to combat this form of inflation. If they don’t they risk people loosing confidence in money (The very foundation of the financial system). Back in November 2005 I wrote an article where I calculated the monetary inflation adjusted price of Gold in Australian dollar terms. I looked at the growth rate of Australian money supply (M3) and compared this with the world average growth rates in above
