This article contains a summary of the interview of Bert Dohmen’s from Dohmen Capital by Jim Puplava from Financial Sense. The interview contains a section about investing in gold, silver and mining shares between 21:45 and 34:00 (listen here to the mp3).
When investing in gold or silver, you need to take a long term investment approach. Bert Dohmen believes that gold is going to hold its value over the long term. By contrast, paper currencies cannot hold their value. Paper currencies has been losing their purchasing power for the past 50 years. The ponit is, they are now doing so at an accelerated rate.
The result of the huge amounts of debts cannot be paid back. Central planners are buying bonds to finance the debts, but that’s not a solution … by contrast, it’s worsening the situation. The real rush into gold will come when people on a large scale will start to understand how these debt states are working and where the Fed it getting its “money” from to finance their debts.
Gold has held its purchasing power for 5,000 years. It has been a store of value for all that time. It will continue to do so.
That’s why an announcement of QE3 (what investors all are waiting for) will probably cause only a short spike in the markets. It would not be real optimism. A monetary stimulus cannot create economic recovery and the economic figures do not always tell the true story. Two examples: GDP growth is limited to 1.5% in Q2 (not the higher figures reported by the government); retail sales increases are mostly due to price increases.
The point with gold investors is that even they are focusing on the short term. Long term holders are selling their holdings when the gold price goes down (let’s 100 dollars on a given day). You should not get caught up in the short term noise. If you have long term gold or silver investments, you should even not look at the gold price on a regular basis, but only check it for example a couple of times a year.
The personal longer term view of Bert Dohmen when it comes to gold and silver investments? “Gold is a great buying opportunity … Within the timeframe of last year, it’s best buying.”
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