Metal

In one of our evening chats, Vivian asked - rather seriously - whether she should buy some precious metal as part of her investment portfolio.

She had entirely logical reasons. After taking over Fanny Mae and Freddie Mac, and making AIG a state-owned enterprises, the next financial giant that is going to file for Chapter 11 bankruptcy protection would probably be the Federal Reserve per se - unless it makes (oh, sorry, prints) more money.

In other words, the risk of inflation is real.

On the other hand, global economy is expected to lie low for some years. Loan and mortgage would be more carefully scrutinized, and our biggest customer needs time to recover from his recent maniac episode and over-spending.

It implies that the stock market would take even longer to regain the momentum.

Isn't it the classical scenario for buying gold and silver ?

PS. Vivian may be right. (How else could your wife be ?) Nonetheless I have my eternal reasons against precious metal: it is not a business and therefore could not be called an investment at all. More importantly, gold or silver never pays dividend !