One chart to remind investors why they should own gold

Seeking Alpha/Hebba Investments/3-16-2020

“While we were writing this article, the Federal Reserve made an emergency rate cut and introduced QE5 to try and add liquidity to markets. While we expected the rate cut, the QE was a surprise and despite that move markets are down significantly. Despite all of this it is important that investors don’t miss the forest for the trees. Despite the recent plunge in gold (and all assets) these events are actually extremely bullish. With the fall in gold we wanted to share one chart from a presentation we did earlier in the week – one that pretty sums up the case for gold.”

Sources: Hebba Investments, Congressional Budget Office ••••••• Click to enlarge.

“So on the one hand we have a currency backed by a government growing its debt at a much faster rate than its revenues, and the expectation is that that will be sped up as the government spends its way out of a crisis. On the other hand we have gold, which is going through a period in which discoveries and future production are expected to drop.

Which one would you rather own over the long term?”