Bullion Management Group Inc.

Bullion Management Group Inc.

October 22, 2009 10:21 ET

Gold Will Continue to Outshine Other Investments According to Bullion Management Group

Bullion crucial to protecting wealth in new economy

TORONTO, ONTARIO--(Marketwire - Oct. 22, 2009) - Nick Barisheff, president and CEO of Toronto-based Bullion Management Group (BMG) says that even after a 314% increase in the last eight years, gold prices are showing no signs of slowing and all signs indicate that the metal's value should continue grow as we move into the next decade.

"The formula for inflation -- rising oil prices and increasing money supplies -- is already well in play and this should fuel further increases in gold prices," he says. "For the last eight years, gold has out performed every other asset class and all indications are that it will continue to do so for quite some time."

Rising prices

How high prices will go is open to many opinions, but Barisheff is confident in the metal's staying power.

"The question on everyone's mind is how high can gold prices go," he said. "It seemed difficult to appreciate a few years ago when gold prices were $250 that they would go as high as $1,000 an ounce. Even mainstream observers, are now predicting gold prices in the several thousand dollars an ounce. Given the market forces, this seems inevitable."

Addressing gold critics

During his presentation at the World Money Show in Toronto yesterday, he addressed gold critics and their number one argument that gold is not a good hedge against inflation.

"People make comparisons going back several hundred years not realizing that gold was money at a fixed price until 1971. However, since then, the numbers clearly show how the metal works as an inflation hedge. Compared to the CPI since 1971, gold has outperformed inflation continuously throughout the entire period. Even during the bear market decline from 1980 to 2001, gold outpaced inflation." said Barisheff.

In fact, according to Barisheff, gold is more than just a hedge against inflation; it has actually increased its purchasing power rather than just kept pace.

"In 1971 a house would cost 703 ounces of gold, today that house would cost 265 ounces. A compact car would cost 66 ounces in 1971, but only14 ounces today. To purchase a basked of stocks representing the Dow Jones in 1971 cost 25 ounces, today it's 10 ounces of gold. So we see that not only is gold a good inflation hedge, it has actually increased its purchasing power rather than just kept pace," he said.

The number one reason to own gold

However, the most important and immediate reason to have gold in a portfolio is to provide effective economic preparation for the unexpected. Barisheff feels that today's market and economic uncertainties can be traced back to when the US went off the gold standard in 1971.

"Essentially the US dollar replaced gold as the world's reserve currency and being the only currency in which oil could be purchased, the US granted themselves the freedom to print as many dollars as they wished to. Debts have consequences," he observed.

What comes next is anyone's guess, but precious metals will, as they have for thousands of years, provide protection against whatever financial problems arise.

"The best investment strategy for the next twenty years and the best way to prepare for the unexpected is to preserve the wealth we already have," added Barisheff. "In my opinion, nothing will achieve this more effectively, than direct ownership of precious metals, specifically gold bullion."

Bullion Management Group Inc. is one of the world's fastest-growing precious metals bullion investment companies. Its flagship fund is BMG BullionFund, the investment objective of which is to provide a secure, convenient, low-cost alternative for investors seeking the real wealth protection and appreciation that only bullion ownership offers. For investors seeking direct bullion ownership in gold, silver or platinum, BMG BullionBars provides bars in various sizes and offers an allocated and insured storage option.

Contact Information

  • For more information or for a copy of Mr. Barisheff's speech
    from the World Money Show please contact:
    Razor Voice
    John Lindo, Media Relations
    647 893 1741
    jlindo@razorvoice.com
    or
    Bullion Management Group
    Robert Para
    Vice President Marketing
    905-474-1001 x16
    r.para@bmginc.ca
    www.bmginc.ca