Saturday, April 6, 2013

Gold is a Currency and not a Commodity


Original source

Eric Sprott pushed back on the Société Générale's report that gold was in a bubble and would slide to$1375/oz by year's end.

The authors of the report, David Franklin and David Baker, say SocGen is mistaking gold by viewing it as a commodity rather than a currency, and ". . . gold doesn’t really work as a commodity because it doesn’t get consumed like one."

The two argue that the slow growing supply of gold make it a great currency.

"Total gold supply can only grow marginally, while fiat money supply can grow exponentially through printing programs," writes Franklin and Baker.

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