In 2009, investors can look forward to a worthless dollar, according to Kevin DeMeritt, president of Lear Capital.
The Fed is going to print more and more money while spending trillions on stimulus packages. Interest rates are at their lowest in history. This will all add up to a worthless dollar with negative long-term effects on the stock market, the bond market and every American’s purchasing power, DeMeritt said.
Calling this market uncertain is like calling war a spit wad fight. Many people have seen their investments go down—some to zero. And, surprises continue every month. As a result, investors have become equally as concerned about protection as they are about profits.
The economic conditions and political uncertainty have, once again, contributed to gold’s performance, DeMeritt explained. Gold was one of the best performing investments this past year. In 2008, gold outperformed stocks by 30% and real estate in some states by 50%, he noted.
For five years, gold has outperformed the Dow by 500%. Global demand for gold is at record levels, supplies are disappearing and production is at its lowest level in years.
Most central banks aren’t selling gold anymore, they are buying it. The worldwide demand was so high in 2008 that the U.S. Mint ran out of gold coins twice. As demand outstrips supply, some expert are predicting that the price of gold will rise above its inflation adjusted high of $2,200 an ounce over the next few years, more than double where it is today.
Gold has never been worth zero—at any time, in any economy. We will not be waking up to a headline that reads “government bails out gold!”, DeMeritt said.
Kevin DeMeritt, president of Lear Capital, a leading Los Angeles precious metals investment company. www.learcapital.com