| Once investors realise that 90% of all the gold on the markets isn't real, it's just numbers on a worthless contract, they will soon see the true value of gold. Gold futures and gold ETF's (Exchange Traded Funds) are no more than scribbles on a piece of paper. If you don't hold it in your hand or have access to physical pieces of gold or its digital equivalent (the pure 24 karat variety), you don't have gold. It is as simple as that.
What is "paper gold" and why should you get outright physical ownership of gold?
The reason for needing access to your gold is the risk of default if you don't have access. One of the patterns which recurs throughout history is that growing financial sophistication leads to widespread expansion of credit and exposure to default, and few people successfully avoid it when it matters. This next bit will probably leave you scratching your head but hang on in there.
Banks, pension savings, mortgage guarantors and all the major financial institutions on which we depend are now tied up in a web of undelivered assets.
A is the registered owner of (say) a bond, assets in said bond payable by B. In addition, the principal in that bond has then been credit-swapped out to C.
The terms are controlled by a deed drafted by an investment bank (D), and the bank itself receives the interest and that interest has been aggregated with 30 others and sold notionally to E. And E is generally foreign, and flattens the FX (foreign exchange) risk with another bank, (F).
F, in turn, sells and rolls a future on his long currency book, which is bought by another bank for an assured profit by running the position against a higher yield bond bought from a junk-status borrowing customer, which has been insured against the risk of default with G, a major insurer, who happens also (coincidentally) to be A. In the end and finally, it all has to get written off and left to the (willing) governments responsible to absorb. The bill for that, of course, goes to the tax payers.
Is your head sore yet? Did you lose the thread of that chain? Fear not, you are not supposed to understand it, that's the idea entirely! These are the styles of relationship which dominate the world in which ordinary peoples' savings are bound up, and they are very profitable in the short term, always the short term.
This is why financial rather than commercial companies increasingly dominate the list of the top companies in America and Europe. They find it easier to make profits by providing credit and assuming eventual repayment, rather than by actually demanding any settlement. This is also why if we were all to go to the bank and try to pull out the contents of our accounts, we simply couldn't get at them. In a relatively short time the money would be gone. Only the very lucky first few people to pull out would get their cash. And, of course, in short order, the cash would be worthless anyway.
Most of the public's savings products are bound up in these incomprehensible webs. We do not know when and where these webs will break and even most of the people "in the know" don't. The public will, of course, be the last to find out.
It is certain that these webs WILL break, and at an unexpected place and time. Maybe today. Maybe next week. Maybe in a month or two or even a year from now. We just don't know. But break they will.
Every forward thinking person with these types of financial assets would do well to opt out of this roulette game with at least part of their holdings. A purchase of gold, real gold, is a good way to do this.
Paper gold accounts, indexes, spread bets, and futures all fail to extricate the buyer from this web of dependencies because they are based on undelivered and undeliverable gold. There isn't enough gold out of the earth to get anywhere near covering the total that theoretically exists via these exchange traded funds. And that's just one part of the problem.
The only way to opt out of the web is to own physical gold outright or, at least, to directly own the right to have it delivered physically to you in the future. I say that now because the demand for gold is so high as I write this that getting your gold delivered in short order would be very difficult, wherever you got it. At least if you buy it from a company that has a history of delivering the gold to you then you should be safe.
I can buy physical (24 k) gold now from around just $6 per 0.1g and I can buy it in those small quantities. In fact, being able to buy in such small quantities is only part of the advantage. The other major benefit is that I can instantly make it digital so that should the worst happen, I can spend it without actually holding it. So, based on that small unit size, affordability shouldn't be a great problem for many other people either. Gold is affordable for everyone but the bankers don't want you to know that.
I like to think about gold as my money insurance. You've heard the expression "it's as good as gold" many times I suspect. Ever wondered where that expression comes from? It's obvious really, it is an expression of ultimate trust in the ultimate asset. When the financial system goes wrong the smart money always runs toward assets that never disappoint. There are other assets that may emerge with the same long term power of gold but they aren't there yet.
Ask most people where their money is the safest, the answer would be "in property" but that's wrong. That's because they simply haven't ever experienced a real, long-term downturn in property value. If no-one is buying there is no growth.
The price we see for gold is generally the "spot" or current trading price. Most of us realise that you can't buy gold at that price without very deep pockets and a banking or trading licence and, of course, the resources to buy in very large quantities. The prices you see are only for the bankers, the traders and the super rich. But us ordinary folk can get quite close if we know where to look.
I have put together a small PDF that goes through the WHERE, WHY and HOW I buy gold and if you are interested enough to see that for yourself then feel free to click on the link below. If you are not interested, that's fine. I simply hope you found this piece useful and, at the very least, you now have an idea of what may be coming very soon.
Yes, we've all heard it all before. Yes, it just sounds like a bunch of doom and gloom but if you really believe that governments around the world can stop businesses from doing business and stop people earning and spending and put everything on hold and then come out of the other side in any condition to put the pieces back together again in a working manner then you are being unrealistic.
They don't have the political will to totally change the system and with a stroke of a pen write off all the debt and, even if they did, they'd only write off Government debt, not individual debt which you are now, quite possibly, being forced to increase, like it or not. That's where we are. We are now potentially heading for a place where a potato that you grow in your garden will be worth more than the contents of your bank account!
Is this email simply a disguised way of trying to sell you something? No, it is a BLATANT attempt to do so. I absolutely believe that holding some gold, in physical or digital (that'll make sense if you read the PDF) form could be one of the best decisions you can make right now.
John
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