Asset and Wealth Protection
Gold prices have been undergoing a minor correction the past couple of months. I believe it is a healthy correction with higher prices for gold to come in the new year. However, I appreciate that very few people can take advantage of rising gold prices.
The price of gold increased on Friday as investors purchased the metal along with other assets associated with risk, encouraged by positive employment data from the U.S. and a concerted effort by euro zone policymakers.
Europe is heading straight for the financial garbage heap. Economic collapse in Europe would almost surely drag the United States down with it. So get out of debt and buy gold to protect against the coming disaster.
Today’s sovereign debt problems in Europe and the United States create the single biggest risk for Western economies. In order to deal with the economic challenges, the European Union is becoming an increasingly integrated and centralized structure. I have never been a big fan of the EU and its currency, the euro.
The price of gold began to rise when markets opened today, as the value of the metal increased against the dollar due to hopes that Europe will make some progress on its debt debacle.
Have you ever seen “old people” hold and fondle their paper money? They count it, hide it under the mattress and bury it for safekeeping. Remember my example of the power of inflation? I said that you could bury your paper money 40 miles deep in a sealed concrete vault, and it still could be inflated or devalued to nothing. There is no way to preserve your paper money.
Even at these prices, I like physical gold as an investment. I prefer bullion to gold stocks. Everyone who has ever owned an ounce of gold wonders how to store it safely. I have experienced a search for missing gold; it was a nightmare.
Although the U.S. debt situation has not captured much attention lately due to the European debt crisis, the situation in the U.S. has not improved at all. And what’s worse, no measures have yet been taken to address the situation. It’s only a matter of time until world financial markets are focusing on the U.S. situation again.
If you’re going to take someone’s advice, who would you choose: the person who had been consistently right or the person who always got it wrong? The obvious answer is that you would choose the advice of someone with a proven track record of being correct. To do otherwise is pure folly. Yet the American people continue to follow the foolish path. In so doing, they act against their own best interests.
The Midas metal has been on a tear since 2001. Since then, the world has witnessed two major stock market collapses, a boom-bust in real estate, the Great Recession and a European debt crisis. Throughout it all, gold has increased from $300 an ounce to nearly $2,000, before retreating (it currently is around $1,750 an ounce).