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Why Hold Gold?
Study the following list of investment options:
1. Physical Gold
2. Cash Dollars
3. Digital Dollars
4. Stocks And Bonds
5. Mutual Funds
6. Financial Derivatives
Why did I place physical gold as #1 on this list of investment options?
That is because all value of paper investments are actually derived from the value of gold.
This is as true today, as it has always been, even though the US dollar went off the gold standard in 1971.
Just because a government wishes something to be true does not make it so. Unfortunately, this trick has worked on the world. So, even though it is not true, the current foundation of value is based on paper investments.
Now, what if we started to experience a mass liquidation, deleveraging, or a flight to safety? Could that ever happen? Well, believe it or not, we were hours away from that happening during the 2008 Financial Crisis.
Therefore, the only safe place to store value is physical gold in your posession. Plus, not only is it safe, but it has the potential to be revalued as the foundation of all investment.
One day, the world will realise that all paper investments are based on a wish, on that day... All paper investments burn!
Are We There Yet?
Nobody, including me, can predict the future with certainty.
The future is determined by a range of possibilities and probabilities.
I am not predicting the future, but I am giving higher probabilities to a possible outcome.
Are we there yet?
No, we are not there yet, but we could be there as soon as tomorrow.
Is it not better to be aware and prepared 1, 10 or 20 years early, than being 1 day late?
When we get there, It is my opinion physical gold that you hold in your possesion will be a store of wealth unlike any other assett.
In my opinion governments and central banks around the world will embrace the high price of gold because it will bring stability to the world.
In my opinion we will witness an unlimited creation of new paper/digital money that will cause the future value of gold to be much greater than today.
What about silver?
Silver should also greatly increase in value but it does not share the one thing that gold does... it's history as a store of wealth, and the embracement of the big guys, the central banks of the world.
I believe other metals will remain commodities.
Only gold will be revalued in a world of fiat government created money.
Follow The Big Guys!
Central Banks are the big guys.
They have more control over money now than ever before in history.
It is not impossible to think that we could see deflation in the price of bonds, equities, commodities, and paper currencies as we are forced to deleverage from the last 40+ years.
Only gold will emerge from this crisis because it is a currency, just like it has been for the last 6,000 years.
We are witnessing the death of an era. Gold will return to it's historic roots as the only world class store of wealth.
This will be different than the 1970's and "all paper will burn" which includes mining stocks, ETF's, and any other paper claim you hold.
If you don't hold it in your possession, you don't own it.
Think about central banks as individuals, driven by the instinct of survival.
If they simply print money to cover government expenditures (as they are now), they eventually lose all credibility through hyperinflation.
So what will these central banks do in order to survive?
Central Banks in Russia, China and the Middle East are accumulating gold right now.
European Union countries are required to keep a percentage of their foreign currency reserves in gold.
The IMF has been accumulating gold from small countries for years in exchange for giving them dollars.
Follow in the footsteps of these Big Guys!
The Central Banks know that physical gold is going to increase in value, and they are preparing.
Are you preparing?
If You Don't Hold It, You Don't Own It!
Possession of physical gold is the only thing that really matters.
Possession of your money will save you by allowing you to carry your wealth through the coming currency storm.
If you don't hold the physical gold yourself, you don't really own it.
You only own a promise.
Trust is involved and trust will be broken.
Only personal possession qualifies as a payment for your lifes work.
If you don't take your payment today, you may not be able to take your payment tomorrow.
What are you waiting for?
Get your hands on physical gold today!
Gold Is Not A Commodity!
Do you see gold as a commodity? Most north americans do.
We use the word price when speaking of gold.
But, would you ask what is the price of the euro?
No, you would ask what is the exchange rate of the euro?
Would you say you don't have much cash to buy euro's because you are buying milk, bread and butter?
No, because there is a difference between what you hold for wealth and what you spend to live.
We have been taught to think of gold as a commodity.
But, in reality it is an artificially suppressed currency.
This is proven by the fact that Central Banks hold gold as part of their foreign currency reserves.
The Big Guys of the world view gold differently than the little people.
Perception rules the world at this time.
But after the collapse, perception will be destroyed and reality will once again rule.
Anyone holding physical gold will have increased wealth, unlike those holding worthless paper.
When the collapse begins, gold will stop trading everywhere.
For a long time it will not trade at all as it's value will not be knowable.
Holding physical gold will be like possesing an original art piece.
How will you feel tomorrow, knowing that you could have aquired something so rare and valuable today?
What if tomorrow happens today?
Dollars Are Debt!
Do you know that the counterparty to the US dollar is the american taxpayer?
As long as the US dollar remains the world reserve currency, american debt is the currency.
There are more digital dollars in the world than there should be.
If everyone ran to the bank to get their cash, there wouldn't be enough.
This is also true for investors cashing out their holdings.
There could be over $1 Quadrillion worth of digital dollars in the form of derivatives and other holdings already existing in the world.
Where is the cash?
The truth of the matter is that the cash does not exist.
What would it be worth if this cash had to be created?
This is how hyperinflation could begin!
Let's Make A Deal!
If all the gold that has ever been mined is only 5 billion ounces...
If gold is the only currency other than the US dollar which is valued everywhere...
If most central banks in the world hold gold as a foreign currency reserve...
Why is it not valued higher?
Maybe this is why...
What if there was a deal made between America and Saudi Arabia in the 1970's?
What if the deal was to create paper gold and sell it without limit, in exchange for your promise to deliver cheap oil priced in US dollars?
What if the public was taught to believe that paper gold was as good as physical gold?
Wouldn't paper gold basically become another fiat currency?
What if you valued physical gold much higher than the paper price?
Wouldn't it be in your best interest to agree to this deal if you could sell your oil while accumulating physical gold for a low price over many years?
Wouldn't you consider this the deal of the century?
If You Were King?
One night I woke from a dream asking myself the following question...
If I was the king of the world, and I wanted all of my subjects gold...
What would I do?
I would, over many years, sell my gold slowly into the market to keep prices low and satisfy any demand.
By doing this I would destroy the concept of gold as money.
I would teach my subjects that gold is jewelry, not money.
When I saw that the current fiat system was reaching its end, I would allow gold prices to rise enough that my subjects would turn in all of their gold.
I would finance "We Buy Gold" stores.
I would keep the economy in a recession until all of my subjects came to my stores and sold their gold back to me.
Once I saw that sales volume in my stores was slowing down, I would drop the price of gold again.
This would encourage the last of my subjects to sell before it went down further.
Only then, after the maximum amount of gold had been sold back to me would I allow the price to rise to it's true value.
If you were the king of the world what would you do?
Action... The 2008 Financial Crisis.
Reaction... Investors had to accept that they lost some wealth.
The fear of more future losses caused investors to search for safety.
Their reaction was to move some of the remaining wealth away from paper promises to real things.
This is a process that is ongoing today.
Slowly at first, wealth moves from one paper promise to another until a new risk is perceived, then it moves again.
This will continue until the remaining wealth finds real safety.
What is the ultimate safe location for wealth?
Of course, physical gold in your possesion!
This process begins at the individual level.
It will then slowly start to appear at the group level like pension funds and hedge funds.
Then, the process will accelerate as we see nations take action to secure their remaining wealth.
Keep this process in mind as you watch the actions of individuals, groups and nations.
If you watch closely, you will see that this process has already begun at the international level.