Why Own Gold?
There are six primary reasons why investors own
As a hedge against inflation.
As a hedge against a declining
As a safe haven in times of
geopolitical and financial
As a commodity, based on gold's supply
As a store of value.
As a portfolio diversifier.
Gold is a monetary metal whose price is
inflation, by fluctuations in the dollar and U.S. stocks, by
currency-related crises, interest rate volatility and international
tensions, and by increases or decreases in the prices of other
commodities. The price of gold reacts to supply and demand changes
and can be influenced by consumer spending and overall levels of
Gold is different from other precious metals such
platinum, palladium and silver because the demand for these
precious metals arises principally from their industrial
applications. Gold is produced primarily for accumulation; other
commodities are produced primarily for consumption. Gold's value
does not arise from its usefulness in industrial or consumable
applications. It arises from its use and worldwide acceptance as a
store of value. Gold is money.
In contrast to other commodities, gold does not
tarnish or corrode, nor does gold have quality grades . Gold mined
thousands of years ago is no different from gold mined today.
Therefore, gold existing in the aboveground gold stock is
interchangeable with newly mined gold.
The early 1980s presented an once-in-a-lifetime
to buy stocks. Today, economic and political conditions appear to
offer a similar opportunity in tangible assets. The macroeconomic
and political landscape has not looked like this since the hard
asset bull markets of the 1970s. The problems plaguing your stock
portfolio are jet fuel for hard assets.
"A RECIPE FOR DISASTER? The global economic and
market climate looks increasingly precarious. Financial imbalances
have never been greater following an extraordinary period of easy
money. Many countries have experienced housing bubbles and massive
increases in leverage, and global trade imbalances are at
unprecedented levels. RisingU.S. interest rates and high oil prices
now threaten to push the system to a breaking point." (BCA
Like today, the 1970s were a time of huge budget
loose monetary policy, soaring oil prices and the open-ended costs
of war. Today, the combined costs of fighting the war in Iraq and
fighting terrorism at home could match the 12 percent of GDP that
the Viet Nam War cost.
In the coming decade, as the dollar suffers one
great meltdowns in monetary history, gold will reclaim its place at
the center of the global financial system. Gold's value, relative
to most national currencies, will soar. "When East Central Bank
buying outstrips West Central Bank selling, and it will in the
not-too-distant future, the other remarkably bullish fundamentals
for gold will take over and drive the gold price to levels that
most people can scarcely imagine today." (John Embry, Investor's
Digest, March 4, 2005)
Take a look at the following summary of the six
reasons for investors to own gold. They may never be more relevant
than they are today.
I. HEDGE AGAINST
Gold is renowned as a hedge against inflation.
consistent factor determining the price of gold has been inflation
- as inflation goes up, the price of gold goes up along with it.
Since the end of World War II, the five years in which U.S.
inflation was at its highest were 1946, 1974, 1975, 1979, and 1980.
During those five years, the average real return on stocks, as
measured by the Dow, was -12.33%; the average real return on gold
Today, a number of factors are conspiring to
perfect inflationary storm: extremely stimulative monetary policy,
a major tax cut, a long term decline in the dollar, a spike in oil
prices, a mammoth trade deficit, and America's status as the
world's biggest debtor nation. Almost across the board, commodity
prices are up despite the short-term absence of a weakening dollar
which is often viewed as the principal reason for stronger
Oil, Inflation and Gold
Although the prices of gold and oil don't exactly
one another, there is no question that oil prices do affect gold
prices. If oil prices rise or fall sharply, investors can expect a
corresponding reaction in gold prices, often with a lag.
There have been two major upward moves in the
price of gold
since it was freed to float in 1968. The first occurred between
1972 and 1974 when oil prices climbed 325%, from $2.44 to $10.36.
During the same period, gold prices rose 268% (on a quarterly
average basis) from $47.45 to $174.76.
The second major price move occurred between 1978
when oil prices increased 105%, from $12.70 to $26.00. Over the
same period, quarterly average gold prices rose 254% from $178.33
II. GOLD - HEDGE AGAINST A DECLINING
Gold is bought and sold in U.S. dollars, so any
the value of the dollar causes the price of gold to rise. The U.S.
dollar is the world's reserve currency - the primary medium for
international transactions, the principal store of value for
savings, the currency in which the worth of commodities and
equities are calculated, and the currency primarily held as
reserves by the world's central banks. However, now that it has
been stripped of its gold backing, the dollar is nothing more than
a fancy piece of paper.
III. GOLD AS A SAFE
Despite the fact that the United States is the
remaining superpower, there are a myriad of problems festering
around the world, any one of which could erupt with little warning.
Gold has often been called the "crisis commodity" because it tends
to outperform other investments during periods of world tensions.
The very same factors that cause other investments to suffer cause
the price of gold to rise. A bad economy can sink poorly run banks.
Bad banks can sink an entire economy. And, perhaps most importantly
to the rest of the world, the integration of the global economy has
made it possible for banking and economic failures to destabilize
the world economy.
As banking crises occur, the public begins to
paper assets and turns to gold for a safe haven.
When all else fails, governments rescue
themselves with the
printing press, making their currency worth less and gold worth
more. Gold has always risen the most when confidence in government
is at its lowest.
IV. GOLD - SUPPLY AND
First, demand is outpacing supply across the
production is declining; copper production is declining; the
production of lead and other metals is declining. It is very
difficult to open new mines when the whole process takes about
seven years on average, making it hard to address the supply issue
quickly. Gold output in South Africa, the world's largest gold
producer, fell to its lowest level since 1931 this past year as the
rand's gains prompted Harmony Gold Mining Co. and rivals to close
mines despite 16 year highs in the gold price.
Growing Demand - China, India and Gold
India is the largest gold-consuming nation in the
China, on the other hand, has the fastest-growing economy in modern
history. Both India and China are in the process of liberalizing
laws relating to the import and sale of gold in ways that will
facilitate gold purchases on a mammoth scale.
China is teaching the West something new. Its
growing at 9 percent per year, is expected to become the second
largest in the world by 2020, behind only the United States. Last
year Americans spent $162 billion more on Chinese goods than the
Chinese spent on U.S. products. That gap has been growing by more
than 25 percent per year. China 's consumer class, meanwhile, is
spending on everything from bagels to Bentleys - and will soon
outnumber the entire U.S. population. China's explosive growth
"could be the dominant event of this century," says Stapleton Roy,
former U.S. ambassador to China. "Never before has a country risen
as fast as China is doing."
China recently passed legislation that will allow
country's four major commercial banks to sell gold bars to their
customers in the near future. Currently, individuals in China are
only allowed to buy gold-backed certificates from the Bank of China
and the Industrial and Commercial Bank of China.
V. GOLD - STORE OF
One major reason investors look to gold as an
is because it will always maintain an intrinsic value. Gold will
not get lost in an accounting scandal or a market collapse.
Economist Stephen Harmston of Bannock Consulting had this to say in
a 1998 report for the World Gold Council, " ...
although the gold price may fluctuate, over the
very long run gold has consistently reverted to its historic
purchasing power parity against other commodities and intermediate
products. Historically, gold has proved to be an effective
preserver of wealth. It has also proved to be a safe haven in times
of economic and social instability. In a period of a long bull run
in equities, with low inflation and relative stability in foreign
exchange markets, it is tempting for investors to expect continual
high rates of return on investments. It sometimes takes a period of
falling stock prices and market turmoil to focus the mind on the
fact that it may be important to invest part of one's portfolio in
an asset that will, at least, hold its value."
Today is the scenario that the World Gold Council
was referring to in 1998.
VI. GOLD - PORTFOLIO
The most effective way to diversify your
protect the wealth created in the stock and financial markets is to
invest in assets that are negatively correlated with those markets.
Gold is the ideal diversifier for a stock portfolio, simply because
it is among the most negatively correlated assets to
Investment advisors recognize that
investments can improve overall portfolio performance. The key to
diversification is finding investments that are not closely
correlated to one another. Because most stocks are relatively
closely correlated and most bonds are relatively closely correlated
with each other and with stocks, many investors combine tangible
assets such as gold with their stock and bond portfolios in order
to reduce risk. Gold and other tangible assets have historically
had a very low correlation to stocks and bonds.
Although the price of gold can be volatile in the
short-term, gold has maintained its value over the long-term,
serving as a hedge against the erosion of the purchasing power of
paper money. Gold is an important part of a diversified investment
portfolio because its price increases in response to events that
erode the value of traditional paper investments like stocks and
50 Random Facts About . . .
- The term "gold" is the from the Proto-Indo-European base
*ghel / *ghol meaning "yellow," "green," or possibly
- Gold is so rare that the world pours more steel in an hour than
it has poured gold since the beginning of recorded history.
- Gold has been discovered on every continent on earth.
- Gold melts at 1064.43 degrees Centigrade. It can conduct both
heat and electricity and it never rusts.
- Due to its high value, most gold discovered throughout history
is still in circulation. However, it is thought that 80% of the
world's gold is still in the ground.
- Seventy-five percent of all gold in circulation has been
extracted since 1910.
- A medical study in France during the early twentieth century
suggests that gold is an effective treatment for rheumatoid
- Gold is so pliable that it can be made into sewing thread. An
ounce of gold can be stretched over 50 miles.
- Gold is edible. Some Asian countries put gold in fruit, jelly
snacks, coffee, and tea. Since at least the 1500s, Europeans have
been putting gold leaf in bottles of liquor, such as Danziger
Goldwasser and Goldschlager. Some Native American tribes believed
consuming gold could allow humans to levitate.
- The largest gold nugget ever found is the "Welcome Stranger"
discovered by John Deason and Richard Oates in Australia on
February 5, 1869. The nugget is 10 by 25 inches and yielded 2,248
ounces of pure gold. It was found just two inches below the ground
- Amid recession fears in March 2008, the price of gold topped
$1,000 an ounce for the first time in history.
- Traditionally, investors try to preserve their assets during
hard economic times by investing in precious metals, such as gold
and silver. The World Gold Council released a report in February
2009 that indicated the demand for gold rose sharply in the last
half of 2008.
- The Dow/Gold ratio, which shows how much gold it would take to
buy one share of the Dow, is a good indicator of how bad a
recession is. In early 2009, the Dow/Gold ratio appeared to be
heading toward the same low ratios that occurred during the 1930s
- Gold is chemically inert, which also explains why it never
rusts and does not cause skin irritation. If gold jewelry irritates
the skin, it is likely that the gold was mixed with some other
- One cubic foot of gold weighs half a ton. The world's largest
gold bar weighs 200 kg (440 lb).
- In 2005, Rick Munarriz queried whether Google or gold was a
better investment when both seemed to have equal value on the stock
market.h By the end of 2008, Google closed at $307.65 a
share, while gold closed the year at $866 an ounce.
|The last time Olympic gold medals
were entirely of gold was in 1912
- The Olympic
gold medals awarded in 1912 were made entirely from gold.
Currently, the gold medals just must be covered in six grams of
- The Incas thought gold represented the glory of their sun god
and referred to the precious metal as "tears of the Sun." Because
gold was not yet used for money, the Inca's love of gold was purely
aesthetic and religious.
- Around 1200 B.C., the Egyptians used unshorn sheepskin to mine
for gold dust from the sands of the Black Sea. This practice is
most likely the inspiration for the "Golden Fleece."
- In ancient Egypt, gold was considered the skin or flesh of the
gods, particularly the Egyptian sun god Ra. Consequently, gold was
unavailable to anyone but the pharaohs, and only later to priests
and other members of the royal court. The chambers that held the
king's sarcophagus was known as the "house of gold."
- The Turin Papyrus shows the first map of a gold mine in Nubia,
a major gold producer in antiquity. Indeed, the Egyptian word for
gold was "nub," from gold-rich Nubia. While Egyptian slaves often
suffered terribly in gold mines, Egyptian artisans who made gold
jewelry for the nobles enjoyed a high, almost priestly status.
- Though the ancient Jews apparently had enough gold to create
and dance around a golden calf while Moses was talking to God on
Mt. Sinai, scholars speculate that it never occurred to the Jews to
bribe themselves out of captivity because gold was not yet
associated with money.
|There are more than 400 references
to gold in the Bible
- There are more than 400 references to gold in the Bible,
including specific instructions from God to cover furniture in the
tabernacle with "pure gold." Gold is also mentioned as one of the
gifts of the Magi.
- The Greeks thought that gold was a dense combination of water
- In 560 B.C., the Lydians introduced the first gold coin, which
was actually a naturally occurring amalgam of gold and silver
called electrum. Herodotus criticizes the materialism of
the Lydians, who also were the first to open permanent retail
shops. When the Lydians were captured by the Persians in 546 B.C.,
the use of gold coins began to spread.
- Before gold coins were used as money, various types of
livestock, particularly cattle, and plant products were used as
currency. Additionally, large government construction projects were
completed by slave labor due to the limited range of money
- The chemical symbol for gold is AU, from the Latin word
aurum meaning "shining dawn" and from Aurora, the Roman
goddess of the dawn. In 50 B.C., Romans began issuing gold coins
called the Aureus and the smaller solidus.
- When honking geese alerted the Romans that the Gauls were about
to attack the temple where the Romans stored their treasure, the
grateful Roman citizens built a shrine to Moneta, the goddess of
warning. The link between rescued treasure and Moneta led many
centuries later to the English words "money" and "mint."
- Between A.D. 307 and 324, the worth of one pound of gold in
from 100,000 denarii (a Roman coin) to 300,000 denarii. By the
middle of the fourth century, a pound of gold was worth
2,120,000,000 denarii-an early example of runaway inflation, which
was partly responsible for the collapse of the Roman Empire.
- The Trial of the Pyx (a public test of the quality of gold)
began in England in 1282 and continues to this day. The term "pyx"
refers to a Greek boxwood chest in which coins are placed to be
presented to a jury for testing. Coins are currently tested for
diameter, chemical composition, and weight.
- During the fourteenth century, drinking molten gold and crushed
emeralds was used as a treatment for the bubonic plaque.
- In 1511, King Ferdinand of Spain coined the immortal phrase:
"Get gold, humanely if possible-but at all hazards, get gold."
- Both Greeks and Jews begin to practice alchemy in 300 B.C. The
search to turn base metals into gold would reach its pinnacle in
the late Middle Ages and Renaissance.
- In 1599, a Spanish governor in Ecuador taxed the Jivaro tribe
so excessively that they executed him by pouring molten gold down
his throat. This form of execution was also practiced by the Romans
and the Spanish Inquisition.
- Venice introduced the gold ducat in 1284 and it became the most
popular gold coin in the world for the next 500 years.
Ducat is Latin for "duke." It is the currency used in
Shakespeare's Romeo and Juliet and is referenced in
The Merchant of Venice. In his song "I Ain't the One,"
rapper Ice Cube sings that "he's getting juiced for his ducats."
The ducat is also used in the "Babylon 5" sci-fi series as the name
of the Centauri race's money.
- Originally the U.S. mint made $2.50, $10, and $15 coins of
solid gold. Minting of gold stopped in 1933, during the Great
- The San Francisco 49ers are named after the 1849 Gold Rush
- Gold and copper were the first metals to be discovered by
humans around 5000 B.C. and are the only two non-white-colored
- The value of gold has been used as the standard for many
currencies. After WWII, the United States created the Bretton Woods
System, which set the value of the U.S. dollar to 1/35th of a troy
ounce (888.671 mg) of gold. This system was abandoned in 1971 when
there was no longer enough gold to cover all the paper money in
|The world's largest stockpile of
gold is five stories underground in the Federal Reserve Bank of New
- The world's largest stockpile of gold can be found five stories
underground inside the Federal Reserve Bank of New York's vault and
it holds 25% of the world's gold reserve (540,000 gold bars). While
it contains more gold than Fort Knox, most of it belongs to foreign
- The "troy ounce" of gold comes from the French town of Troyes,
which first created a system of weights in the Middle Ages used for
precious metals and gems. One troy ounce is 480 grains. A grain is
exactly 64.79892 mg.
- The gold standard has been replaced by most governments by the
fiat (Latin for "let it be done") standard. Both Thomas Jefferson
and Andrew Jackson strongly opposed fiat currency. Several
contemporary economists argue that fiat currency increases the rate
of boom-bust cycles and causes inflation.
- The Mines of South Africa can descend as far as 12,000 feet and
reach temperatures of 130 degrees F. To produce an ounce of gold
requires 38 man hours, 1400 gallons of water, enough electricity to
run a large house for ten days, and chemicals such as cyanide,
acids, lead, borax, and lime. In order to extract South Africa's
yearly output of 500 tons of gold, nearly 70 million tons of earth
are raised and milled.
- Only approximately 142,000 tons of gold have mined throughout
history. Assuming the price of gold is $1,000 per ounce, the total
amount of gold that has been mined would equal roughly $4.5
trillion. The United States alone circulates or deposits over $7.6
trillion, suggesting that a return to the gold standard would not
be feasible. While most scholars agree a return to a gold standard
is not feasible, a few gold standard advocates (such as many
Libertarians and Objectivists), argue that a return to a gold
standard system would ease inflation risks and limit government
- The first recorded gold ever discovered in the United States
was was a 17-pound nugget found in Cabarrus, North Carolina. When
more gold was discovered in Little Meadow Creek, North Carolina, in
1803, the first U.S. gold rush began.
- In 1848, while building a saw mill for John Sutter near
Sacramento, California, John Marshal discovered flakes of gold.
This discovery sparked the California Gold Rush and hastened the
settlement of the American West.
- In 1933, Franklin Roosevelt signed Executive Order 6102 which
outlawed U.S. citizens from hoarding gold. Owning gold (except for
jewelers, dentists, electricians, and other industry workers) was
punishable by fine up to $10,000 and/or ten years in prison.
- Tiny spheres of gold are used by the Amersham Corporation of
Illinois as a way to tag specific proteins to identify their
function in the human body for the treatment of disease.
- The purity of gold is measured in carat weight. The term
"carat" comes from "carob seed," which was standard for weighing
small quantities in the Middle East. Carats were the fruit of the
leguminous carob tree, every single pod of which weighs 1/5 of a
gram (200 mg).
- Carat weight can be 10, 12, 14, 18, 22, or 24. The higher the
number, the greater the purity. To be called "solid gold," gold
must have a minimum weight of 10 carats. "Pure gold" must have a
carat weight of 24, (though there is still a small amount of copper
in it). Pure gold is so soft that it can be molded by hand.
Let's start with the basics. I have some characteristics that no
other matter on Earth has...
I cannot be:
- Printed (ask a miner how long it takes to find me and dig me
- Counterfeited (you can try, but a scale will catch it every
- Inflated (I can't be reproduced)
I cannot be destroyed by;
- Fire (it takes heat at least 1945.4 degrees F. to melt
- Water (I don't rust or tarnish)
- Time (my coins remain recognizable after a thousand years)
I don't need:
- Feeding (like cattle)
- Fertilizer (like corn)
- Maintenance (like printing presses)
I have no:
- Time limit (most metal is still in existence)
- Counterparty risk (remember MF Global?)
- Shelf life (I never expire)
As a metal, I am uniquely:
- Malleable (I spread without cracking)
- Ductile (I stretch without breaking)
- Beautiful (just ask an Indian bride)
As money, I am:
- Liquid (easily convertible to cash)
- Portable (you can conveniently hold $50,000 in one hand)
- Divisible (you can use me in tiny fractions)
- Consistent (I am the same in any quantity, at any place)
- Private (no one has to know you own me)
I am internationally accepted, last for thousands of years, and
probably most important, you can't make any more of me.
You've heard that statement before - but do you know what
it really means? Money is a medium of exchange and a store of
value. Almost anything can be used as money, but obviously some
things work better than others. It's hard to exchange things people
don't want' and other things don't store value well. Over thousands
of years, I have emerged as the best form of money (along with
The paper dollars in your wallet are technically a currency, not
real money. In other words, they are a government substitute for
money. The man you call Aristotle best defined the primary reasons
why I'm considered money: a good form of money must be durable,
divisible, consistent, convenient, and have value in and of
- It must be durable because you can't have your money
disintegrating in your pocket or bank. That's why you don't use
wheat; it can rot or be eaten by insects.
- It must be divisible, which is why you don't use diamonds or
artwork; they can't be split into pieces without destroying the
value of the whole.
- The lack of consistency is why you can't use real estate. One
piece is always different from another piece.
- It must be convenient, which is why you don't use other metals
like lead. The coins would have to be too big to handle easily to
be of sufficient value.
- It must have value in and of itself. This is why you shouldn't
use paper as money.
- And one more thing: I can't be created out of thin air. Not
even the kings and emperors who clipped and diluted gold coins used
paper as money, so Aristotle didn't include this in his list, but
So you see, there's no superstition here. It's simply common
sense. I am particularly good for use as money, just as aluminum is
good for making aircraft, steel is good for the structures of
buildings, uranium is good for fueling nuclear power plants, and
paper is good for making books. If you try to make airplanes out of
lead or money out of paper, you're in for a crash.
And by the way, don't fret about those who say I'm not as good
an asset as an income-producing vehicle. They misunderstand my
role. I'm not trying to be a stock, for example. My function is as
money and a store of value, so the proper comparison is to your
dollars, or what you call Treasury Bills (of similar nominal
value). And here is where I excel and serve my purpose: since 1913,
the US dollar has lost 96% of its purchasing power. I have lost
Remember, I am the only financial asset that is not
simultaneously someone else's liability. I don't require the
backing of any bank or government.
The History Lesson
Because I am eons old, I've observed something throughout
history that you may not have thought much about: government fiat
currencies are a relatively new invention, and none has endured.
Eventually, they have all failed. Me? I've never been defaulted on
or worth zero. Remember this the next time you have any doubts
about my long-term worth.
Another of my roles is to protect your purchasing power. Here
are a few examples of how my purchasing power has endured:
- During the time of Christ, an ounce of me purchased a Roman
citizen his toga (suit), a leather belt, and a pair of sandals.
Today, one ounce will still buy a good suit, a leather belt, and a
pair of shoes.
- In 400 BC, during the reign of King Nebuchadnezzar, some
scholars reported that an ounce of me bought 350 loaves of bread.
Today, an ounce still buys about 350 loaves ($1,700 divided by 350
- In 1979, my average price was $306.68. This bought an
average-priced full-size bed. Thirty-three years later, $1,700
would still buy you a nice full-size bed (and then some).
You can rest assured that over time, I will hold my value. And
when you near the end of your life, you can pass me on to your
loved ones, knowing full well they will have something that cannot
be devalued, debased, or destroyed.
What Color Is Your Money?
Like you, I'm concerned about the current state of fiscal and
monetary affairs. It seems your government leaders have boxed
themselves into a corner. They've incurred too
debt and are spending too much money. It's important that
you understand some lessons from history about this kind of
behavior so that you're certain of what I can do for you.
The common denominators that lead to the downfall of every fiat
currency are the two big Ds: debts and deficits. With that in mind,
consider the following:
- Morgan Stanley reported that there is "no historical precedent"
for an economy that exceeds a 250% debt-to-GDP ratio without
experiencing some sort of financial crisis or high inflation. US
total debt currently exceeds GDP by roughly
- Detailed studies of government debt levels over the past 100
years show that debts have never been repaid (in original currency
units) when they exceed 80% of GDP. US government debt will exceed
100% of GDP this year.
- Investment legend Marc Faber reports that once a country's
payments on debt exceed 30% of tax revenue, the currency is "done
for." By some estimates, the US will hit that ratio this year.
- Peter Bernholz, a leading expert on hyperinflation, states
unequivocally that "hyperinflation is caused by government budget
deficits." Next year's US budget deficit is projected to be $1.3
The solution many of your leaders are pursuing is to create more currency units. Here's an
picture of the increase in the US monetary base vs. my rise in
price since 2008, when your problems starting surfacing.
(Click on image to enlarge)
The monetary base has grown 205.8%, while my price is up 65.8%.
This alone implies that my price in dollars is likely to climb much
This is also the reason why I'm not in a bubble, as some have
tried to claim. It is your central banks and bond markets that
are in a bubble. The fact that my price is rising is
a warning that what your leaders are doing is unsustainable and
potentially dangerous to your currency.
Think about this: the US has debt backed by debt, based on debt,
dependent on debt, and leveraged with debt. You can, for example,
buy a bond (i.e., lend money) on margin (i.e., with borrowed
money). This is not a sound way to run financial markets.
Meanwhile, the warning bells continue to sound regarding
Europe's debt crisis. In just the past 30 days:
- Moody's cautioned that it may cut the triple-A status of
France, Austria, and the UK; and it downgraded six other European
nations including Italy, Spain, and Portugal.
- Standard & Poor's cut the triple-A status of France and
Austria, while Italy, Spain, Portugal, Cyprus, Malta, Slovakia, and
Slovenia were downgraded.
- Fitch downgraded Belgium, Cyprus, Italy, Slovenia, and Spain,
and stated there was a 50% chance of further cuts in the next two
- Standard & Poor's downgraded 34 of Italy's 37 banks.
- Moody's warned just last week that it may cut the credit
ratings of 17 global financial institutions and 114 European
The European crisis is far from over; and the path of least
resistance for politicians is to create more currency units. This
action can and will have clear and direct consequences: currencies
will devalue, and inflation - perhaps hyperinflation -
Once again, I encourage you to use me to protect some of your
How Much Is Enough?
Given the state of your monetary system, you should accumulate
me on a regular basis. Just buy some every month and put it in a
safe place. After what I've witnessed throughout history, and based
on the current path your government leaders insist on pursuing, I
suggest using me as your savings vehicle instead of putting dollars
in a bank.
If you don't own enough of me when these fiscal troubles really
accelerate, I fear you will regret it. I've warned many in the past
about the dilution of nations' currencies, and those who didn't
heed my warnings experienced severe financial pain. Excuses won't
pay the mortgage nor feed the family when the effects of currency
debasement hit your home and pocketbook.
Make sure you own enough of me to make a difference to your
portfolio. This means having more than a couple.
How do you know if you own enough? Ask yourself:
If inflation returns, or even hyperinflation hits...
If the economy is flat...
If uncertainty and fear continue around the globe...
If stock markets languish...
If the amount of spending from the world's governments proves
If government interference in the economy continues to
If the value of the US dollar takes a major fall...
If the world enters a recession or depression...
If you wonder if you have enough "safe" money...
...would you feel that you own enough of me?
Buy a sufficient amount so that as your currency continues to
lose value, your portfolio won't. If you do your part, I promise
that I'll do mine.
Your monetary friend,