Gold - The Safest Haven?

By: Ian Campbell | Thu, Sep 8, 2011
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I recently read 'Is the U.S. Dollar Losing Its Safe-Haven Status' - reading time 2 minutes - thinking time much longer. This article has caused me to re-visit my constant self-debate as to whether physical gold is the best available 'safe-haven'.

While the article is short, it quotes directly from a research note from the Bank Credit Analyst ('BCA' - a well-regarded research house). According to the above article, the note says:

The article further reports the BCA as saying "This time around, however, the safe-haven factors have not turned in favor of the dollar thus far, even though it is premature to make definitive conclusions due to data lags. U.S. macro policies are the obvious reasons for the dollar's diminishing role as a refuge: fiscal policy is a mess and the Fed is committed to devaluing the dollar".

So where does that leave me on the U.S.$ and physical gold?

I have believed for some time that to suggest U.S. Treasuries are other than - at best - a very short term 'safe haven' makes no sense, if it can be said ever to make sense in the current economic environment. That the U.S.$ is a 'safe haven' is, of course, a common mantra of many financial markets advisors, conventional media writers and commentators, and Internet writers and commentators.

As for physical gold, I have believed for some time that physical gold is the best save haven against both fiat currency erosion (read in particular U.S.$ erosion), inflation, and deflation. This where 'safe haven' is defined not to be referenced to gold's price at a point in time, but rather is referenced to gold's purchasing power over time. Until I convince myself otherwise, or someone else convinces me, I continue to think physical gold currently is the best 'safe haven' as I have defined that term.

Something for you to think about, and then reach your own updated conclusions with the help of your investment advisors.

 


 

Ian Campbell

Author: Ian Campbell

Ian R. Campbell, FCA, FCBV
Economic Straight Talk

Through the Economic Straight Talk Newsletter Ian R. Campbell shares his perspective on the world economy, the financial markets, and natural resources. A recognized business valuation authority, he founded Toronto based Campbell Valuation Partners (1976), Stock Research Portal (2007) a source of resource companies market data and analytic tools, and Economic Straight Talk (2012). The CICBV* annually funds business valuation research in his name**. Contact him at icampbell@srddi.com.
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