Gold Is Not The Next Disaster

Michael Yoshikami
CNBC
Oct 4, 2010

With gold hitting all-time highs, talk about a gold bubble grows increasingly louder.

The skeptics say that this commodity cannot go higher and a crash is inevitable. Abandon this tangible asset before it’s too late, they cry.

I disagree.

For all practical purposes, gold is no longer a commodity. Instead, it is portfolio insurance in age of unprecedented anxiety and uncertainty. Gold is at a high price because high anxiety reigns. While some believe the good old days of calm are just around the corner, I believe this is not the case. The global economy is at an inflection point and as economic strength shifts to emerging markets, turmoil will continue.

Gold provides a hedge as the world changes.

One seldom discussed reality is that for many investors, gold is no longer just a commodity but now an alternative currency.

Full article here