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ThisIsMoney: Gold signals the end of a rigged game

LONDON, 31 July 2011 - Comment from world-leading gold ownership service BullionVault features today in a report by ThisIsMoney - the financial website for the UK's Daily and Sunday Mail newspapers - on gold's continued under-investment.

"Forty years ago next month," says the Mail on Sunday's economics editor, Dan Atkinson, "America broke the Dollar's link with gold and Western currencies broke their ties to the Dollar.

"[This was] just the prelude to a far longer and graver crisis...And gold, the spurned monetary spouse of the Nixon presidency is now the Dollar's competitor - and a dangerous one.

"Indeed, it is a competitor for all paper currencies, being the only monetary asset that does not rely on someone else's solvency."

Quoting data supplied by BullionVault - the secure, low-cost gold ownership service based in Hammersmith, West London - ThisIsMoney notes that gold's current price for UK investors of £1000 per ounce is "a record on paper but not once inflation is taken into account," with the real peak coming in 1980 at £1400 in today's money "as the second oil shock, the Soviet invasion of Afghanistan and the Iranian hostage crisis saw investors flee paper money."

Today, "Gold is not currently over-invested," says Adrian Ash, head of research at BullionVault, "pointing out that mid-20th Century investors would hold up to 20 per cent of their portfolios in gold against less than a tenth of that today."

"He would say that?" asks the Mail on Sunday's economics editor. "Perhaps, but a different expert [points to] the structural over-investment in government bonds...bulldozing investors into the paper of overindebted governments...[with] rules that force pension funds to hold Government bonds...[plus] quantitative easing, which prints money to buy gilts.

"All this amounts to a huge hidden subsidy to public sector borrowing. But gold?s performance suggests this rigging of the game may not prove sufficient."

You can read Dan Atkinson's article on gold's under-investment at ThisIsMoney here...

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