Wider Credit Spreads Favor Gold

Gold is the ultimate safe haven because it is no one else’s obligation. It isn’t issued or backed by any government, central bank or corporation so the value of the gold you own is completely independent of anyone else’s performance or lack of it. When you own a bond, its value is dependent on the creditworthiness of the issuer. You don’t really own an asset, you own their obligation to you. When you own a stock, the value is dependent on corporate performance and whether or not management meets its obligations to you as a shareholder. Stocks aren’t assets, they are paper promises.

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