Letters from Readers: Golden opportunity for gold, An easy way to benefit Indian charities
Golden opportunity for gold
I find the Moneywise article titled “A Closer Look at Gold” in the June issue slightly misleading because the author seems to equate gold with stocks and to speculate gold’s future like one speculates the stock market.
But I consider gold to be a safe bet against hyper-inflation for the following reasons:
(1) Gold prices follow oil prices, not those of stocks, in tandem.
(2) Many nations (such as Russia, Brazil, Mexico, etc.) around the world have gone broke in the past, and people who had hoarded the yellow metal in these countries came out ahead of people who had hoarded currency notes, because the governments voided the old currency and printed new currency.
(3) The stock market is subject to drastic swings due to speculation and companies can fail. Remember the crashes of 1987 and 2000?
(4) Some brokers suggest investing in stocks of gold mining companies, but I prefer direct investment in gold.
(5) Other investments such as housing could result in losses. See what a slump the housing market has been in these past five years.
(6) Compared to other commodities gold and platinum are the best investments because of their limited supply and increased demand by industrialized nations.
(7) Unlike other metals gold is not subject to corrosion or rust; so it can be stored for a long time without degradation.
It is, of course, difficult to keep gold in large quantities. Indians store it in the form of jewelry, but there is the extra cost of making it, and the possibility that you could be cheated by jewelers. Do not buy gold coins because coins have big markups and many coins do not contain 24-carat gold (beware of gold-plated coins). The best way to buy gold is in one-ounce bullions. One can easily buy 100 one-ounce gold bullions with 99.99 percent purity and store them safely in bank vaults. Many nations are experiencing financial crisis and inflation is on the rise. Since gold prices have more than tripled in the past five years, it is likely they will go up further.
An easy way to benefit Indian charities
With reference to your article on charitable giving (“The Charitable Indian-American,” May issue), it may be helpful for donors who wish to benefit charities in India to know about an organization called Partners in Sharing Association (PISA). The goal of PISA (see www.pisausa.org) is to make it easier for donors in the U.S. to send funds to charities in India and also get the full benefit of tax deductibility in the U.S. PISA has 501(c)3 status and forwards donations to charities in India. For example, I have had excellent success over many years in making tax deductible donations through PISA to the Bombay Leprosy Project.
David Kearns, M.D.
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