FinancialEdge: How Much Disaster Can Gold Hedge?

Lying somewhere between meme and cliché is the idea that when the going gets tough, the smart buy gold. Gold has had a special hold on the minds of many investors for centuries, if not millennia, offering the promise of being the one asset that will never go to zero, and the one medium of exchange that other people will always accept in trade. While these notions are basically true, investors would do well to consider just how much disaster they can really hedge by buying gold.

Forget Inflation 

Whenever it is time to debate the merits of gold, it is only a matter of time before someone mentions the iffy correlation between gold and inflation. The history of gold versus inflation looks a lot like a bungee cord - years and years go by and nothing seems to be happening, until there's a point of release and the price of gold rockets up.

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