Sometimes in determining what ones Personal Gold Reserves should be it is informative to review what large nations are doing. It has been recently learned that Russia and Kazakhstan have increased their gold reserves in December as the yellow metal gained for the 12th consecutive year. That means for the last 12 years in spite of the ups and downs throughout the year, gold has closed above where it was the year previous.
One has to wonder what other commodity has enjoyed a similar climb. Yet to speak of gold as a commodity is not quite accurate. In spite of what Ben Bernanke says, gold has been utilized as money the world over and has been a store of value for over five thousand years. Gold can as has been used as a fully functional currency.
We need only examine inflation charts and Dollar value charts and correlate them with gold price charts to see the how one affects the other and learn that as inflation rises the Dollar value falls and the price of gold rises.
Morgan Stanley reported in January 24th 2013 that gold would rally this year and on into 2014 in an effort by the Fed to shore up the economy and flagging recovery. Analysts Peter Richardson and Joel Crane state that gold prices will be strengthened by investment and central bank purchases.
Perhaps the same logic large nations are employing to secure their economic future could be applied to our own portfolios. Countries both large and small are acquiring gold as a haven (read store of value) from frail currencies and potential ongoing inflation. Reviewing the United States monetary policy that reaches into the trillions, it would seem to imply that we are headed into a realm of more inflation and not less. One has to wonder how long this kind of currency sleight-of-hand can continue. Even the Fed chairman Ben Bernanke has stated that the U.S. debt is unsustainable. So before the Central Banks drive up the price and reduce availability in their quests for a “balanced” asset portfolio it may be prudent to explore the possibilities of adding gold to our own personal gold reserves.