The indiscriminate use of monetary policy by the governments to curb the recession, lead unprecedented budget deficits. They have not much option left but to print the money to fill the gaps. The aftermath of this will bring up dormant monster inflation in coming time.
The long term value of paper currency if we talk in economic language is zero. The store of value hence lies in Gold. The other reason that makes Gold as a candidate of investments is in coming inflationary era, the people who are risk averse would not find bond as a safe instrument to invest. So though investment in Gold does not bring us any cash flows, but in gloomy situation when value of paper currency starts depreciating and monster inflation eats out any gain from investments in bond, and sovereign debt crisis is hovering over a region, nothing is more secured investments as Gold.
My take would be shun the bond and invest in Gold even though if it is at historically high level. J
Rranjan27@gmail.com
