American Investment Services, Inc.

Disciplined, Diversified, & Cost Effective

Sept. 2009 – Of Gold and Governments

“Gold should also have modern appeal in a world increasingly suspicious of central planning. The gold standard is an automatic mechanism, operated in a decentralized manner that coordinates the self-interest of all market participants. As such, gold is uniquely equipped to accommodate the greater sophistication and complexity that come with globally integrated markets. In contrast, central banking essentially is a form of central planning, applied to the narrow but ubiquitous precincts of money and banking.”
                                                                                                                                                                                                                                                     — Gold and Liberty

In the current economic and political climate, suspicion toward central planning is certainly evident. The gold price has risen concurrently. While its price is affected by myriad factors, there is no question that many investors value gold precisely because it is a form of money that cannot be destroyed “at the stroke of a pen.”

While others are only now piling into gold, AIS has been recommending that investors hold gold as a portion of their portfolio since our founding in 1978.

Similarly, our parent organization, the American Institute for Economic Research, has for over seven decades reminded its readers of gold’s unique attributes, which stand in sharp contrast to those of the world’s various fi at currencies. Unlike paper money, gold cannot be created and is limited in supply.
Our decades-long endorsement of gold has been uninterrupted, despite wars, business cycles and seemingly countless investment fads. But this continuity arises from observation, not ideology. Economics is a social science so financial economists must be willing to reject long held convictions if empirical findings suggest doing so. Evidence to date continues to reveal that, without exception, the purchasing power of the world’s currencies deteriorate over time. Gold, though its price is highly volatile in the short term, provides the best form of insurance against rapid monetary inflating and financial crises.

Also In This Issue

Assessing Bonds: Duration Versus Maturity
Target Date Funds: Don’t Be A Target
The High-Yield Dow Investment Strategy
Recent Market Statistics
The Dow Jones Industrials Ranked By Yield
Recommended Investment Vehicles