Back to Basics

Gold prices are looking frothy and various measures of consensus sentiment are back at extremes in the short term.  We are looking for a correction before increasing our exposure to precious metals as our long-term bullish case for Gold as a store of value has not changed.  It is interesting to note that a few leaders in the mainstream community are coming around to this view as well – note the recent comments from World Bank President Robert Zoellick, and this weekend’s NYT Op Ed by James Grant, editor of Grant’s Interest Rate Observer, and one of our favorite long-term thinkers in the business.

And on a completely unrelated note, we found this illustration between the correlation of sovereign debt risk and men living with their parents, entertaining if nothing else.  As a man named Homer once advised, “It’s funny ‘cause it’s true.”



Disclosure: At the time of publication, the author was long Gold and Silver, although positions may change at any time.