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Gold Update

Twice I have recommended purchasing gold. Today the Fed cut interest rates a half point to 3%, and hinted at future rate cuts. This has and will continue to result in the erosion of the dollar. Furthermore, the political landscape is shaping up so that another generation of borrow-and-spend politicians with no regard to the dangers of this central economic planning will be at the helm in the near future. So here’s the tip again: buy gold.

I first made this suggestion when the Fed began the unprecedented action of buying billions upon billions of mortgage securities and thereby inflating the money supply and promoting malinvestment. That was August 14, 2007. GLD (gold trust) was at $66.29.

I again made the suggestion when the Fed began cutting rates to turn the economy around. They have since cut rates .75 points in one day, .5 again today, and more to come. This again is inflationary. That suggestion was made on November 3, 2007. GLD was trading at $79.83.

Today I am again making this suggestion because the Fed is cutting interest rates with no end in sight and the House has recently approved an economic stimulus package that consists, in large part, of tax rebates funded by increase of the national debt. Also inflationary. This is January 30, 2008. GLD is at $92.06.

Perhaps it bears repeating:

If you think that the military-industrial complex, government welfarism, fiscal irresponsibility on behalf of banks backed by the federal government, or budget deficits will decrease in the foreseeable future and the Fed will thusly stop doling out money, then this is definitely a bad time to get into gold. I’m giving this advice of the persuasion that we’ll see something on the universal health care side of the spectrum, backed by that free and easy Fed monopoly money.

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