September 19, 2012) - Voices of the financial world have been very positive in the media lately in their speculation regarding the price of gold, with many predicting huge gains. Famed Swiss hedge fund manager Felix Zulauf is joining those voices, encouraging those who choose gold bullion overstocks or bonds, saying that the bond market, according to his analysis, should be headed towards a bear market after 30 years of being bullish. In an article from King World News, he stated that those with a plan to buy gold when prices are starting to drop are on the right track and should see major growth in the value of their holdings in the years to come. Zulauf went so far as to say that not only does he foresee the Treasury bond market grinding down, but also the stock market and even currencies.
The price of gold should rise because it is where investors go when the system they are in begins to hit the downward part of a natural cycle that seems to happen over and over throughout history. Gold bullion ends up being attractive when fiat currencies start to lose their value as Zulauf points out. Central banks will continue to bail out bankrupt parts of the overall system because this is necessary to the system's survival, but a collapse will come and those who choose to buy gold instead of buying into a clearly ailing system stand a better chance of surviving the collapse. It remains important to note that a collapse does not have to be of apocalyptic proportions to deal severe damage to the portfolios of private investors.
Bonds are overvalued, Zaluf told the press, adding, "... from now on buying the dips [in the price of gold] is the right strategy because I think we have actually entered the next cyclical bull market within the secular bull run that we are still in."
This same strategy has been employed by those with wealth to protect for centuries, even before stock markets as we know them were widespread. Investors who chose precious metals had something that was not dependent upon the efficient management of a nation's economy by its government. Those who had hard assets knew they could sell them if the need arose and use what they earned from doing so to pay for whatever they needed. This time, if the financial systems of the world stutter or even collapse, the effect will most likely be global in scope and this will leave those without hard assets in possibly dire straits.
Gold, silver, and platinum remain valuable for their many industrial purposes and the fact that they do not require the kind of space to store that iron or oil do, nor do they require the kind of care that grain or other agricultural commodities require. The world's investors continue to focus on precious metals no matter what the economy does in the moment because they understand that in the long run, these are the investments that are providing value as scarcity naturally raises due to the limited supplies of these resources on Earth.