Have you been following gold recently? It surpassed the previous record set in March 2008, hitting an intra-day high of $1045 per ounce. The purpose of this blog is to discuss real assets such as gold which will maintain their purchasing power over the longer term. Gold is mainly up because the dollar is down. This means that it takes more dollars to purchase things on the world market.
It will take more dollars to purchase a barrel of oil. It will take more dollars to purchase that foreign automobile. The dollar is worth less today than yesterday and now has less purchasing power. Did your salary go up? Did you make more today than yesterday? You can bet with oil going up that a gallon of gas will cost more in the next day or so if not on your way home from work.
Why is it that gasoline can spike up by 30 and 40 cents per gallon overnight but never fall more than a few cents at a time? That certainly irritates me. Maybe I just ought to own a gas station or at least stock in an oil company. That way when the cost of oil goes up, I will be sad because I will pay more at the pump, but happy because my investments are worth more.
Another good reason to own real assets! So, the question is: Are you sad because the dollar is down? Or happy since gold is up? I'm happy today.
Until next time--Keep it REAL!