Great Post Lockitt. I was living in Cape Town SA in the late...

Great Post Lockitt.

I was living in Cape Town SA in the late seventies and a year or two older than you I think. I saw inflation soar in the mid seventies and around the late seventies both property values and gold soared. Why? Inflation. With us big time then and back again soon even bigger time if not already.

I recall a SA bank economist predicting US$800 gold when it was less than $600 (correct me anybody if my memory failed me)and he was laughed at by the establishment at the time. Well it happened as he said it would and a lot faster than the experts thought it would.

The circumstances today compared to then are much much worse given not only the global eco crisis but also the uncertainty of developments around N Korea, the ME and Oil supplies.

Gold and oil used to move in tandem but I have not been following that relationship for a while but it seems out of kilter now. Gold up, oil down. Back to equillibrium means oil up or gold down. Any thoughts from this forum?

My belief is gold up and oil even faster to catch it. Silver also has some equillibrium work. Cheap interest rates right now help the acquisition of hard assets in the short term as well as high dividend payers like some property trusts (provided they have good NAV's and are takeover material. How long the cheap interest rates will be around is I suppose anyone's guess. They cannot last.

Funny now to think that my hugely socialist/liberal economics dept lecturers at university at the time pushed their view of gold as being an archaic and unnecessary store of value. I recall even writing a mini-thesis supporting this view. They were what is now termed as Euro-Centric? Asia coming through now and a little less trusting of paper than most eductionally manipulated Europeans.

I had an elderly German neighbour when I was in my teens. His opinion on which of the DM or gold was the better investment is probably not suitable for this forum.