I am basically Austrian in my approach to Economics. I wish Murray Rothbard and Hayek were still alive. However, while I agree that when governments are debasing paper currencies in order to run huge debts and deficits, hard assets such as Gold and Silver should provide protection to the ordinary citizen, unfortunately, Gold and Silver are traded assets and their prices can be bid up to extremes.
Consequently, the ordinary person cannot buy Gold or Silver blindly with the expectation that their prices will always go up. As we have seen over the last year, Gold and Silver prices can also come down sharply.
As with buying any asset, getting the timing right is key, but also incredibly difficult.
I am inclined to believe that predictions of much higher Gold and Silver prices, due to ultra-loose monetary policies, will eventually be proven to be correct, but how long this will take is very difficult to foresee.
In the meantime, the recent pull back in prices may provide us all with an opportunity to add small quantities of Gold and Silver - perhaps one or two coins per month - to our portfolios, with the aim of price averaging over the next year.
