Subject: Friend, it turns out that the dog was worth more than the sheep...

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Friend, I thought this might be of interest to you...

Gold is seen by many as a hedging device or safe harbour during stormy seas. It is also seen (to use a term I picked up from reading investment articles from the USA) as a sheepdog that is there to protect the sheep (other investment assets).

In other words, Gold isn't normally seen as an investment in its own right but, rather, a device for balance, security, fall back and protection. In fact it is very much seen as the ultimate money and it has, after all, been used as money one way or another for thousands of years.

And yet few people buy Gold. Why is that? It is one of only a few things out there that we all know is safe.

Recently (last week in fact) JP Morgan Asset Management shared a chart which I find fascinating and which clearly shows that the sheepdog is actually worth a lot more than the sheep.

They have shared evidence that quite clearly shows, over the last 20 years, Gold outperforming most other investment areas that the North American investing and savings public got into based on JPM's own in house data. 

What's really remarkable about this chart (and a little sad) is that the average North American investor has not even seen returns that kept pace with inflation and the average investor they refer to is, of course, their own average investor.

And there is no escaping the fact that most of what we do in this area (in the UK) follows suit. Take a look at the chart in question and remember as you look at it, that the source is JP Morgan and remember that the stuff they get into and suggest for people is very much what gives us the average investor return figures used inthe chart.


The average investor portfolio used in the example above is (I think deliberately) complicated and some people would have been more into one thing and less into something else and so on but the fact is they definitely would not have been into buying Gold through JP Morgan or (probably) Real Estate Investment Trusts. 

You can't buy Gold from JP Morgan directly anyway. Only Gold ETF's (Exchange Traded Funds). You can't buy anything from JP Morgan directly accept advice, portfolios, funds that invest in the movement of asset prices and various other instruments of prediction and return. And even the professionals that predict and advise, seemingly, rarely get it right. 

If they (JPM) had told everyone to go buy physical Gold back in 1999 they'd be superstars of course but there is no money in recommending the purchase of Gold to hold as an asset.

I should categorically state here that they are no different to any other "investment house". And thus, they are doing nothing but what the banking world in general does. Peddling in investment vehicles from which they can earn regular management fees and a spread. 

If the average investor was a little more sensible than most he/she might have also been part of the sheepdog group who used gold as a safety net. There is no doubt that the people of the USA (on average) are more inclined to buy gold than we are but Gold buying, even there, is still at a critically low level. But the US Government, well that's another story. They are buying Gold now at a pace. Way more than they have historically purchased.

Why is that? It certainly isn't to back their dollar currency, that isn't backed by diddly squit any more, just like our wonderful British Pound.

Here in the UK, compared to the USA, we still have an alarming level of trust in our banking system after everything that has happened over the last 10 years or so. But look closely and you will see that the cracks are appearing. I am noticing more and more talk out there about financial issues on the horizon and it certainly isn't just talk in the UK.

Why am I sharing this? Well, it is simple; everywhere I look IF I look closely enough and I do not swallow the Government and central bank BS that they want me to swallow, I see a financial market coming apart at the seams. I see a greater and greater dependence on a debt based system that, when it all sinks into its own pit, is going to hurt some of us really badly. And it will sink.

We are in grave danger of making the holes in the boat even bigger because of the long running Brexit issue. What worries me most is that we may not get any warning prior to the next financial crash. It could hit us like a tsunami. 

JP Morgan's own chart clearly tells you where you would do well to put a good chunk of any spare money you can find. But what it doesn't tell you is this:

Gold's biggest benefit is not the fact that it has (remarkably) out-performed assets that are seen as out and out investments but that it is still one of only a few things that we can put our money into that is safe and reliable. Cryptocurrency may offer us another alternative but it clearly has some way to go to gain widespread trust. 

If you own Gold, you can always eat and you will always have something to trade with.  

Ironically, it was J.P Morgan (the man himself) that famously said "Gold (and silver) is money. Everything else is credit." And continuing with the Americans, Herbert Hoover once said "We have Gold because we cannot trust governments." 

Gold may not always outperform the sexy investment fund and, frankly, it doesn't need to; but it isn't going down in value any time soon either. Why do you think (and feel free to look this up yourself) that governments around the world, through their central banks, are buying Gold now at the fastest pace ever? it isn't just the good 'ole US of A. These governments can see what's coming even if we can't.

Just before I finish this email I have to quote Kenneth J Gerbino, another American investment guru. I don;t know much about the man but I just love his quote  He said:  

"If you don’t trust gold, do you trust the logic of taking a beautiful pine tree, worth about $4,000-$5,000, cutting it up, turning it into pulp and then paper, putting some ink on it and then calling it one billion dollars?"

That kind of says it all really...

If you want to know how I buy Gold, where I buy and why I buy it from where I do, feel free to drop me an email but otherwise I just hope that the message here was little thought provoking.

John
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