Gold: Long-Term Hedge or Bubble About to Burst?

Two of our editors differ sharply over the glittery stuff's future. See whose side you're on.

Andrew Tanzer: Love It

The surge in gold prices to about $1,400 an ounce makes perfect sense. Confidence is waning in paper money, such as the dollar, and for good reason. Our monetary and fiscal policies are remarkably lax, debasing our currency as a store of value and raising the specter of inflation down the road. The Federal Reserve Board continues to pump money into the economy, and we will run huge budget deficits as far as the eye can see, dramatically expanding our financial liabilities. Martin Murenbeeld, an economist at Canada's DundeeWealth Economics, shows that over the past decade, gold prices have moved almost in lock step with the expansion of global liquidity (U.S. money supply plus overseas foreign reserves). Both have multiplied fivefold.

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Contributing Writer, Kiplinger's Personal Finance

Andrew Tanzer is an editorial consultant and investment writer. After working as a journalist for 25 years at magazines that included Forbes and Kiplinger’s Personal Finance, he served as a senior research analyst and investment writer at a leading New York-based financial advisor. Andrew currently writes for several large hedge and mutual funds, private wealth advisors, and a major bank. He earned a BA in East Asian Studies from Wesleyan University, an MS in Journalism from the Columbia Graduate School of Journalism, and holds both CFA and CFP® designations.