Wednesday, May 23, 2012

GOLD GLITTERS BUT WILL IT GLOW? BFM INTERVIEW WITH DATO' LOUIS NG

http://bfm.my/assets/files/RinggitAndSense/2012_05_24_RinggitAndSense_PublicGold.mp3

Let's hear this out.
Dato' Louis Ng's radio interview with BFM Radio - The Business Station.

2001, gold price starts to boom until 2011. Gold is the excellent asset class.
2011, slow growth but positive
2012, no gain yet.

Forecast for this year (2012) depends on Federal Reserve (Fedex). Are they going to pursue on QE3?

QE3 : Quantitative Easing 3. In layman term, QE is the printing of US Dollars.
Question is will it take place?
If Fedex is going to launch/ pursue on QE3, the commodity price especially gold will jump.

Gold is part of monetary system.

Dato' Louis expected the gold price to increase by 15% to USD1800/oz - USD1900/oz by end of the year 2012.


Gold appreciates against USD. RM has any impact? 

Pegging period, USD1 : RM3.70 happened 14 years ago. Our currency appreciates from RM3.10 to RM3.70, an increase of 18% - 20%. Gold price appreciated more than that, then. Thus, offset of loss of currency strengthen is minimum.


How long do you need to hold gold?


People always look for return on every investment. As per Dato' Louis, the thinking has to be changed that we buy gold to protect our purchasing power in the real wealth term. In the market, too many people has too much money.

1971, Richard Nixon decide to back USD with gold. There is no gold to back. At that time gold price is only USD35/oz. Now gold price is about USD1600/oz. Multiple to 40 times.

Comparing price of nasi lemak in 1970s and now. Nasi lemak is the same. Commodity is still the same.

Commodity does not increase in price but because of the depreciation of the currency.

Mankind increase more fiat money, not backed with gold/silver, the currency with depreciate more.

Gold is the ultimate money.




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