Fool’s Gold or Gold Fools?

Posted: 19/04/2013 in Finance, GOLD, Vanuatu
Tags: , , , , , ,

Why do so many people have it wrong?  It’s time to set the record straight.

vcm_s_kf_repr_259x194First, I am unashamedly – a “Gold Bug”.

“What’s that?” you ask.

“A person who believes that GOLD is a “safe haven” and a “store of wealth” no matter what its price is”.

Sound crazy to you? Perhaps this small selection of charts will help “show you the way” – if needed, that is, as I know some readers are “gold bugs” also.

Indices Charts to April 2013

The First Chart shows what happened in various markets in the 6 months leading up to the Lehman Brothers-led GFC (19th September, 2008). Where would you have prefer to have had your money invested?

The Second Chart shows the state of the same market prices 6 months after the start of the GFC. Where would you have prefer to have had your money invested?

The Third Chart  (going clock-wise) shows the markets’ performances since GFC dayWhere would you have prefer to have had your money invested?

Finally, the Fourth Chart shows how these markets have fared over the past 5 years. Where would you have prefer to have had your money invested?

I have already admitted being a gold bug. Still, I also believe that there’s a place for investing in high-quality, well-diversified dividend-paying stocks in one’s portfolio but they need to be companies that generate significant cash-flow regardless of the state of the economy.

Right now, we have a gold and silver “bust” taking place…..or so it may seem.

Goldman Sachs, a HUGE /investment bank/financial institution, said “Sell” gold and….that’s exactly what the “mug punters” have done. Gone out and swapped their gold for paper money, money that’s being being printed “faster than a speeding bullet” by Japan, America and Europe…..and China. Go figure.

Meanwhile, Goldman Sachs and other firms like it make a killing from their short positions on the gold price while providing opportunities for Central Banks (mainly) and their “mates” to buy up gold at “cheap” prices.

All the signs are pointing to a near-future GFD (Global Financial Disaster) just as the signs were there for the GFC (Global Financial Crisis).

So what’s the difference between a “Crisis” (Sept. ’08) and a “Disaster”? 

Well, a crisis you can liken to a small isolated town in the middle of a gigantic flood. The people of the town are fortunate in that they have a strong levee surrounding the town to protect them. However, these floods have now brought the flood waters level to the very lip of the levee. That is a “Crisis”. A “Disaster” is when the heavens open up with a further record deluge of rain and the levee gives way, flooding the town.

Right now, the financial floodwaters are lapping at the lip of the levee. Where would you prefer to have your money invested?

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Comments
  1. Youn Heat says:

    When this “Disaster” comes if its as bad as you make out I don’t want gold I’ll want a shotgun and a bunker with tin food.

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