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Hoard Gold or Food? Inflation concerns remain.

November 30, 2012

Hoard Gold or Food? Inflation concerns remain.

While gold has had a fantastic run in price appreciation over the last 10 years and even more importantly the last 2 or 3 –lack food source starve gold bug investor increase cost we may be over looking commodities that are experiencing even faster growth.

Elizabeth Campbell published an article today at Bloomberg.com titled:

New Norm High Food Costs Boost Supply Risk as World Hunger Grows

Food as a “whole” is now at all time high levels of price, relative to the spending power of consumers. Ms. Campbell writes:

“Even after the World Bank’s food-price index slipped from a record in July, the measure was still 7 percent higher in October than a year earlier, the Washington-based lender said today in a report. While costs have dropped in recent months, fats and oils still are 12 percent more expensive than a year earlier, and grains are “very close” to the all-time high reached in 2008, the bank said.”

For those that have consistently added gold and silver bullion to their investments over the last few years, there is often much cajoling by their friends and family who say things like, “Well that’s great you’ve got all that gold – but when disaster hits you sure can’t eat it!”

Most bullion investors / hoarders will point out that you can’t eat paper money or coins either, but that doesn’t stop people from “saving for a rainy day”. What gold bugs will tell you is that the precious metal is more likely to hold it’s value and even increase relative to paper currency as inflation continues it’s rise.

dividend cash paying stocks daily dividend investor blog siteAs we see the price of basic necessities such as food and water continue to become more scarce and prices continue to rise – it will be those hard assets such as gold, silver, real estate and oil that will continue to hold and increase in value. And only those with income sources other than traditional 9 to 5 employment, such as rental property, dividend paying stocks and royalties will continue to thrive.

Knowing that even today, many people on the planet go without enough to eat on a daily basis, it’s fairly obvious that this problem is only getting worse not better.

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