Official figures released recently by the World Gold Council have confirmed that the annual demand for gold in 2010 rose by 9%, a ten year high, suggesting that the current price is not only sustainable but likely to increase further. Indeed, if you want to protect what you have and want to be sure that you are left with something for your future survival then get into gold now. It is the inflation proof investment that is like fire insurance for your personal wealth. Exactly like fire insurance, do you think you should buy it before or after the event? Words: 702
So says the editor of www.goldcoin.org in an article* which Lorimer Wilson, editor of www.munKNEE.com, has reformatted and edited […] further 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. The article goes on to say:
This increasing demand can be attributed to several factors:
- an even higher demand for jewellery
- strengthened demand in key Asian markets, notably in China (+70% year-on-year) and India. The Indian market saw a revitalisation of the sector as awareness grew regarding the protection of wealth in gold. Chinese demand was backed by a strengthening retail investment by private affluent investors looking to gold bars and coins as a safe refuge for their newly acquired wealth
- Central Banks became net purchasers of gold, after 21 years of being net sellers, to consolidate their positions.
The Central Banks, [for their part] fear:
- being exposed to foreign exchange fluctuations due to currency dilution and devaluation,
- the possibility of Eurozone collapse as sovereign debt issues, austerity measures and bailouts fail to shake off the looming depression that awaits,
- the instability in the Middle East,
- the soaring oil price and
- the risks of increasing inflation in developed economies.
It is also proof that the central banks see gold as a safe haven to protect their reserves of wealth…aware as they are. of instability and potential crisis ahead.
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What will happen if Greece, Ireland or any other of the Eurozone members are unable to abide by their debt resolution measures? Chances are there will be more than one if not all of them. Politicians wrangle with the shackles of increasing debt which they are trying to defer to another generation on a daily basis but the fact is they can’t run away fast enough and they WILL get caught out. What then?
Demand for Paper Gold Down 45%!
It is hardly surprising that real demand is focused on physical gold and this can be illustrated by a drop of 45% for the year in demand for ETFs (or paper gold). Investors know that protecting their wealth ahead of a crisis can only be achieved by owning physical tangible assets.
Physical Gold More of a Guarantee than Paper Gold
When a crisis hits hard no-one can guarantee the value or indeed the honouring of paper transactions as the financial institutions offering such products are themselves vulnerable to the systemic debt that pollutes all economies and that influences everyday life across the globe. Nobody predicted that an institution such as Lehman Brothers would fail or that RBS and Lloyds Banks would be brought to their knees. Similarly no-one can tell you today who will be the next casualty when economies falter. It could be your bank, your pension provider, your employer.
If you want to protect what you have and want to be sure that you are left with something for your future survival then get into gold now. It is the inflation proof investment that is like fire insurance for your personal wealth. Exactly like fire insurance, do you think you should buy it before or after the event?
- The above article consists of reformatted edited excerpts from the original for the sake of brevity, clarity and to ensure a fast and easy read. The author’s views and conclusions are unaltered.
- Permission to reprint in whole or in part is gladly granted, provided full credit is given as per paragraph 2 above.
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