This week, gold has been in the news since the Swiss this weekend will be voting on whether to return the country to a gold footing, keeping an equivalent of 20 percent of gold against the value of the circulation of the Swiss franc.
The vote is expected to fail. However, in the unlikely event it should pass, gold could get a boost.
I didn’t realize just how bad an investment gold is until I started to crunch the numbers.
This will surprise you!
Eighty-eight years ago, that’s how far records go, one kilogram of gold (35 ounces) would have bought you a midsize Chevrolet.
Today, 88 years later, guess what a kilogram of gold will buy you?
The answer is a midsize Chevrolet.
Adjusted for inflation, one dollar invested in U.S. equities 88 years ago would today be worth $385.
Adjusted for inflation, one dollar invested in gold 88 years ago, would today be worth one dollar.
So at about $1150 per ounce, where is gold going from here?
With inflation at an (almost) all-time low and an appreciating dollar, probably to $800, at least midterm. Maybe!
Karsten Malmos
