“They have deliberately created this situation and they are committed to low prices,” said Sechin. Their motivation? That’s another story, one in need of a geopolitical expertise.
Additional good news (for investors and speculators) comes in the rise of gold, as widely predicted. A textbook, fear-induced flight to safety; one that’s easier to buy into than ever, via instruments like the Gold Trust SPDR (GLD), which gained 5% just this week. Gold has surpassed its 12-month high with a rise of 18% this year alone, its price exceeding $1,260 per ounce”a $175 gain in 45 days”along with evidence of the trend continuing upward and”who knows?”into a gold rally? For those who recall the days of $1,800 per ounce?
By comparison, the Dow Jones Industrial Average is down 8.3% for the year. And the only proof you need to buy (more) gold is such evidence of contagion and fear as a series of bad headlines overshadowing financial news. Bad news + fear = buy gold. Period. Although the investment doesn”t end there. If you buy physical gold, as recommended, taking delivery is one of many pleasures to be relished in a gold trade.
As CBS MoneyWatch‘s Anthony Mirhaydari puts it: “It’s hard to ignore the allure of an investment that isn”t a liability for someone else (such as cash, a bank deposit or bond note) and that has maintained its purchasing power throughout history.” The CBS reporter mentions two selling points. Gold’s history is formidable, for one. Gold’s independence in regard to today’s shaky financial system, for two”this is its unique charm and its security. The unbacked, nonreciprocal nature of real gold”its nonliability status (see the CBS quote)”this is what gives the asset class its endurance and its irresistible appeal in times of uncertainty.
The leverage-addicted world economy”so interconnected and so contagious”offers infinite drama and complexity. You can play the markets by playing gold, too. And when it moves, gold is just that much more predictable and slower-moving than most other asset classes. Another benefit, allowing the luxury of deliberation upon your investment without worrying about missing the optimal entry point.
Holding and buying gold reflects a refreshingly asymmetric view of the economy. Certainly, it’s a long-, not short-, term investment position (years not months). For the real “goldbugs” (investors and enthusiasts), gold is a way not only to diversify but also to simplify. It’s a way of life, almost. A club, even. It’s also a finer distillation”a truer mirror image”of the yo-yoing global economy? A measure that makes weighing and handling your assets so much more manageable”on the human level.
And guess what? You”re safe from both NIRP and the end of cash”and much else besides”the more gold you hold.
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