Gold Should Be Bought To Maintain Purchasing Power – Rick Rule – Kitco News

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Kitco News talks with Rick Rule of Sprott Asset Management about gold and the US dollar, or as he refers to it, the “anti-gold.” According to Rule, gold should be bought to maintain purchasing power and those who buy it for other reasons are “making a mistake.” He added that although such factors as the global economy and government insolvency remain constant, gold prices are still shifting; and this is only because investor perceptions of the metal are changing. According to Rule, despite the mid-April correction, markets have not reached the bottom and he is waiting to see “absolute capitulation,” which would be similar to April’s selloff but would have a longer duration. Rule compares investing in 10-year U.S. treasuries rather than gold, and states that the government instrument is far riskier. So much so that the U.S. government’s ability to service its debt at current purchasing power level is “almost nonexistent” and for the risk investors are assuming, they will only receive 1.75% returns. Rule still has faith in the metals and states that gold should be a long-term investment. Kitco News, May 22, 2013.

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