If you’re not holding some gold in your portfolio, you could be missing out on the ultimate hedge against economic uncertainty. While naysayers like James Surowiecki dismiss gold as an “atavistic” relic, the numbers tell a different story. Since Surowiecki’s misguided critique 20 years ago, gold has soared over 400% while Treasury bonds eked out a mere 93% gain.
In his latest Smart Money article, investing guru Eric Fry makes a compelling case for why gold’s scarcity gives it a timeless allure and inherent value that paper assets simply can’t match. As Fry points out:
“Unlike a precious metal, a U.S. dollar contains no measurable quantity of any element on the periodic table, nor any resource whatsoever that could contribute to any industrial application. Furthermore, a U.S. dollar is a poor conductor of electricity and combusts near an open flame.”
Eric Fry
In other words, the dollar’s value relies entirely on collective belief, not tangible worth. And with the U.S. federal debt ballooning to 52 times the value of our gold reserves, that belief is on increasingly shaky ground.
Meanwhile, gold’s rarity and usefulness give it staying power. Just look at how it’s trounced Treasury bonds over the past two decades:
The verdict is clear: In an era of runaway debt and currency debasement, gold offers a safe haven that paper assets simply can’t match.
Now, I’m not saying you should put all your eggs in the gold basket. As Fry wisely notes, a diversified portfolio focused on great businesses with growth potential is still the foundation of wealth building. But allocating a portion to precious metals provides an essential hedge against dollar weakness and black swan events.
So don’t let the gold haters sway you – scarcity never goes out of style. To learn how to optimally manage precious metals in your portfolio, I highly recommend checking out Fry’s Investment Report. His track record speaks for itself.
