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
So says Tom Essaye (www.moneyandmarkets.com) in edited excerpts from his original article* entitled Your ONLY Protection from the Coming Currency Wars.
Lorimer Wilson, editor of www.munKNEE.com(Your Key to Making Money!), may have further edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) the article below for the sake of clarity and brevity to ensure a fast and easy read. The author’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.
Essaye goes on to say, in part:
Governments Worldwide Keep Printing Themselves into a Corner
Our politicians’ solution to a mountain of debt is to add more! Ballooning deficits and crushing debt have been the result of the financial crisis of 2008, and each year those debt loads the world over have gotten bigger and bigger – and it’s not just the United States that is trying to borrow its way out of a stagnant global economy. Japan, Europe, Brazil, South Korea and many other nations are keeping interest rates ultra-low. They are also encouraging — nearly forcing — countries and individuals to borrow money – and this adds even more to the mountain of debt across the globe.
One of the only logical ways these governments will ever get out of their debt-ridden messes is to debase their respective currencies and while this might sound benign enough we have never before seen so many governments attempting the same thing, i.e. actively depressing their currency in an attempt to boost economic activity and weasel their way out of paying back their debts. This action by the world’s largest governments has sparked the beginnings of a currency race to the bottom, or better termed a “currency war.”…
The Currency Wars: How to Pick the Winning Side
As governments actively devalue their currency it’s causing their trade partners to do the same thing, devalue to stay competitive and this vicious cycle plays out over and over again until all currencies have lost a significant amount of purchasing power. Meanwhile, investors who own assets in those currencies are left holding the proverbial bag!
There are certainly ways investors can protect themselves… but buying stocks and bonds still leaves you exposed to an area of risk — the currency those assets are priced in. For instance, you can own U.S. Treasuries, German Bunds and Japanese bonds but what if all those currencies decline in purchasing power simultaneously — a very real possibility in the future? Then, your investment would suffer because the currency is declining. Your hedging of risk would have provided no real benefit. Gold bullion, however, eliminates this risk.
Bump up Your Buying Power: Long Gold MeansBeing Short Every Other Currency in the World!
Gold bullion is the answer to the currency wars, because it is the only asset you can own that simultaneously lets you short every other currency in the world — all at the same time.
While most people watch the gold price in dollars, keep in mind gold is also priced in euros, yen, won and every other currency. In fact, most people don’t realize that, while gold has had a nice run in U.S. dollar terms, gold priced in yen and euros has produced equally good returns, and at some points even-better returns than the gold price in dollars so, unlike insurance policies, bond holdings or other “safe” investments, gold bullion has the ability to rise in value against every currency in the world — at the same time!
Think of it this way. Say I’m right and currency wars do erupt. [Suppose] it’s five years from now, and exchange rates among the major currencies are roughly where they are now so, while the euro is still 1.31 to the U.S. dollar, both currencies have declined big-time against hard assets like oil, corn, copper, steel, coal and real estate. My gold bullion, however, is much higher than it was — not only avoiding the loss, but most likely booking a profit, too.
[The end result is that,] while my friends and colleagues going on vacation abroad complain about how “expensive” everything is, my gold bullion has gone up in value against the euro, yen, pound, real, and very other currency in the world — making me wealthier across the globe!
How Can the Currency Wars Help YOU Increase Your Global Net Worth?
A European vacation at a fraction of the price thanks to my gold bullion increasing its value with the real purchasing power of the euro has declined — yes, please – and it’s just as easy for you to do the same.
• Only by owning gold bullion can you simultaneously hedge yourself from the currency wars on the horizon and
• only by being a savvy investor can you see the value of your investments rise across all currencies, turning the threat of simultaneous currency debasement (the currency wars) into an opportunity.
Adding gold bullion to your portfolio is the only way to truly protect yourself from potential currency debasement and preserve your purchasing power and standard of living. Other investments simply don’t do the trick. That’s why it’s imperative you own bullion — not just for the potential increase, but also to ensure your hard-earned money holds its value the world over.
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
Comments I have made that “when this [financial crisis] finally ends the big winners are apt to be the ones who have lost the least purchasing power. Keeping score in nominal dollars is likely to be meaningless. Gold tends to hold its purchasing power regardless of what happens to fiat currency.” have prompted questions about a) how to achieve such purchasing power with physical gold when this stage is reached, b) how to go about buying things with gold coins and c) how gold would be utilized under the assumption that a barter system would develop when dollars become worthless. [Let me explain.] Words: 700
Do you own enough gold and silver for what lies ahead? If 10% of your total investable assets (i.e., excluding equity in your primary residence) aren’t held in various forms of gold and silver, we…think your portfolio is at risk. Here’s why. Words: 625
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
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
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