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After having compounded at over 19% p.a. over 11 years, gold certainly should be allowed to just gain 7% in 2012 without some people calling an end to the bull market. Those who believe the bull market is over are mainly the investors who have missed gold going up almost 7 times in since 1999. Let me be very clear, the real move in gold hasn’t started yet, it is still to come. Here are my reasons why. Words: 1000
So writes Egon von Greyerz (http://goldswitzerland.com) in edited excerpts from his original article* entitled WHY QE WILL ACCELERATE AND GOLD WILL FOLLOW.
This article is presented compliments of www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds) andwww.munKNEE.com (Your Key to Making Money!) and may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.
von Greyerz goes on to say in further edited excerpts:
Below I summarise some of the reasons why the real move in gold hasn’t started yet – why it is still to come:
Gold is not an investment, it is money. Gold is the only honest money which reveals governments’ deceitful actions in destroying the value of paper money by printing unlimited amounts of it.
In addition to massive increases in government borrowing worldwide, world central banks’ balance sheets have exploded since 2007 and now stand at $15 trillion.
Most of the money borrowed or printed has been used to save the banking system and very little has gone into the real economy. In spite of this, the banking system is no sounder than in 2007 and nor is the world economy.
The U.S. government is paying $1 billion per day in interest. If interest increased from 2% to 3% on this debt, the U.S. debt in 2022 would be $35 trillion. If rates went up to the historical average level of 5%, the debt, in 10 years’ time, would be $45 trillion. This is with extrapolating current deficits but deficits are likely to accelerate and so is Federal debt.
Fed is indicating that they might stop QE in 2013. That is absolute nonsense. The Fed cannot and will not stop QE. If they did, who would buy the perpetual issuance of virtually worthless government debt that can never be repaid in today’s money?
In many European economies, government makes up 50-60% of the economy. In the US it is now 40%. As Governments worldwide, take an ever greater part of their domestic economies, it makes it practically impossible to grow the economy and repay debt for the shrinking private sector. Governments are non-productive and only consume resources. The only thing they produce extremely well is printed money.
Printed money is like heroin, the patient needs bigger and bigger doses until it finally kills him or makes him totally dysfunctional and this is what is happening to the world economy. Government benefits are increasing and the people are in need of even greater stimulus as unemployment escalates.
The banking system has not been repaired in spite of receiving $ trillions from governments. BoA and other US banks just had to pay out $20 billion linked to their MBS (Mortgage Backed Securities) activities. MBS are a part of a $1.2 quadrillion derivative disaster waiting to happen. That will lead to exponential money printing.
The Basel III regulations for banks have been weakened and postponed again. Banks around the world cannot cope with any serious tightening of the rules. Even stocks and Mortgage Backed Securities (MBS)! are going to count against their capital requirements and final implementation is delayed until 2019. Hopefully the banking system will still be there then.
When this crisis is over most people will not have a pension that they can live on. 46% of Americans have less than $10,000 in retirement savings and 29% have less than $1,000. Also there will be fewer and fewer workers to pay for each retired person. The Japanese demographics are horrific with their aging population.
Real unemployment is now 20-25% in many countries including the U.S.. Youth unemployment is almost 60% in Greece and Spain and up to 50% in many countries. This is a major disaster waiting to happen not just financially but also in respect of social unrest, riots etc.
For all of the above problems, unlimited money printing will take place. The problem in the case of the USA is that as markets start to anticipate this, they will dump the dollar which in turn will accelerate the printing presses and lead to hyperinflation. That outcome is virtually guaranteed.
Gold (and silver) will continue to reflect this destruction of paper money but at an accelerated pace. As gold dipped at the end of December and early January, Swiss refiners received major orders and now have unexpected delays in production.
As I have stressed time and time again, the selling is in the 100 times bigger paper market in gold and silver. The physical market is seeing major and strong demand. As more investors ask for delivery the paper market will panic and gold and silver will surge. This is likely to happen within the next 12 months.
For wealth preservation purposes investors must hold physical gold and silver and store their precious metals outside the banking system.
Editor’s Note: The author’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.
Make no mistake about it, it is the central bankers that are leading governments around by the nose, and by proxy, governments leading people around by the nose, and that “nose” is inhaling “lines” of fiat. Unless cured, all addictions end badly, and the only “cure” central bankers have for ever-increasing fiat is, ever-increasing it more. [You can protect yourself, however, by] demanding less of the valueless fiat and keeping, and growing, your wealth by buying and accumulating real value: physical gold and silver. Anything less, and you are still dealing in the imaginary world that is failing. [This article explains why that is the case.] Words: 834
Have you ever wondered what money really is [and why we need to own some gold as a result]? You’ll notice that everyone you read has a strong opinion , but who’s right? [Let look at the situation and see if we can come to an answer that we both can agree on.] Words: 3086
Today’s world is as uncertain as any we’ve seen in some time. Sovereign-debt crises threaten major economies in Europe and Japan and the fiscal state of the United States is the worst in non-wartime history! It’s no surprise, then, that investors are becoming increasingly attracted to the safety, anonymity and purchasing-power preservation that comes with bullion ownership. That being said, one of the most-often-overlooked benefits of bullion is its ability to help you increase your wealth across currencies, so today I’ll show you how owning physical metals — and the most-precious of them all, gold in particular — can help you to boost your global net worth! Words: 896
I like gold because it’s a risk-reducing, portfolio-diversifying asset. It’s also been a strong-performing asset over the past decade – up nearly 400%. What’s more, it’s been reliable. In 2008, when the major U.S. indices plummeted 37% (and more into early 2009), gold returned nearly 6%. In addition to being an exceptional investment, however, gold has also been an exceptional investment within a portfolio context. That is, it has provided return while reducing portfolio risk. Gold has, in essence, been a free lunch. Words: 490
Some say that the gold price rises and falls, but they are grabbing the wrong end of the stick. It is the purchasing power of national currencies that rise and fall. Here is an analogy to make this point clear. When standing in a boat and looking at the shore, it is the boat (currencies) – and not the land (gold) – that is bobbing up and down. [Let me explain the value of gold further.] Words: 631
Gold and Silver are not an investment! Let me repeat that. Gold and silver are not an investment! Gold and silver are (excuse the pun) the most “solid” form of money you can possess. Yes, these two precious metals are money!…Don’t fear owning gold my friends. Fear not owning gold and silver, especially if you are a saver. [Let me explain.] Words: 795
It would seem that there is a considerable lack of understanding about what the term “safe haven” actually means when it comes to gold. Let me explain just what it means – and does not mean. Words: 740
To fully understand gold’s role in an investment portfolio, we need to adopt a new mindset, a gold mindset which is, simply put: gold is not a bad investment, and gold is not a good investment. Gold is not an investment at all – gold is money.
In our travels to the Middle East, the Far East and South and Central America [we have found that] most people in those parts of the world see gold as the protector of wealth [as opposed to] in the West where it is viewed as a commodity for speculation… [That shouldn’t be the case. Let me tell you why.] Words: 2159
I was taught years ago that “gold is not about price… gold is about value.” Be measured, be balanced and don’t make more of it than it is. Gold is just a tool, an anchor to sound money; to value. [Let me explain.] Words: 1120