As a gold investor in
North America, it sometimes feels like I'm living in some far-off land where
everyone believes in fairy tales and unicorns.
Most people around me
don't seem to see anything wrong with the Fed creating $65 billion a month
out of thin air—hey, it's not $85 billion anymore,
what a relief! It's business as usual for the US
government to spend billions more than it takes in, and a public debt
hovering at $17.2 trillion—up from $7 trillion just 10 years ago—seems no
more alarming than a rainbow.
No surprise then that
these people don't feel any need to own assets that might help them in times
of crisis. Hard assets like… gold.
I'm reminded of a visit I
made to China several years ago. One night, I awoke in the middle of the
night—something was crawling under the bed sheet. I shot up like a
cannonball, trampolined out of bed, and hit the
light switch. I searched and searched for whatever bug had made its way under
the sheet, but never did find the little vermin. Still, I was so creeped out, I spent the rest of
the night on the couch.
I told the staff the next
morning what happened—and they did nothing. They just stared at me. They
spoke English, so it wasn't that they didn't understand me. It was just that
none of them seemed to think it was a big deal. One of them even chuckled.
They obviously didn't appreciate the potential health hazard and had no sense
of customer service. I left bemused, wondering how people could accept
bedbugs as normal—or even if they did, how they could not care about a
customer's experience. It was like being on another planet.
I have some of those same
feelings when I think about mainstream investors today. How can they not
appreciate the potential financial hazard inherent in something as obviously
dangerous as today's unprecedented levels of money printing? How can they not
care that they have nothing solid, like gold, at the core of their investment
portfolios? It's like these people think they live on Planet Sesame Street.
Most people seem to
really believe that today's heavy-handed government interventions are not
only the right course of action, but will have no negative fallout. Massive
currency dilution, unstoppable tides of rising debt, and never-ending fiscal
imbalances are hardly a way to cure decades of money mismanagement, and
certainly aren't consequence-free. How is it that this is not obvious to all?
I honestly don't know.
Perhaps people are aware at some level, but the truth is just too awful to
face, and so people don't.
Very few of my friends
and neighbors own any gold. Rarely am I asked about it anymore, even by those
who know what I do for a living. The doctor I saw last month gave me the
distinct impression I could be doing better things with my money. Most of the
mainstream media ignore gold, while many of the big banks loudly proclaim
their latest short position as if they had some sort of divine insight.
I'm starting to feel like
the proverbial lone voice in the woods…
But We're Not Alone!
As deluded as most
Americans seem to be, that is definitely not the case for everyone in the
world—the Japanese, for example, are much more prudent and levelheaded.
I wonder if my fellow
citizens would feel differently if they lived in any of these countries where
people have witnessed economic insanity firsthand, and are acting
accordingly:
Japan was a net importer of gold in
December, the first time in almost four years. Net purchases totaled 1,885
kilograms (60,604 ounces). It was only the tenth time Japan was a net monthly
buyer since the end of 2005. There are reports that Japan's pension funds,
which hold the world's second-largest pool of retirement assets, are buying
gold.
Dubai gold
jewelers just
reported the strongest gold sales in seven years. Pure Gold Jewelers, one of
the largest dealers in the country, reported a 25% increase in gold jewelry
sales during the Dubai Shopping Festival this year.
The state of
Gujarat in India reported that silver bullion imports hit a five-year record from April
2013 to January 2014. Imports were more than 450% higher than the same period
a year ago. The Indian government has since hiked the import duty on silver
to 15%, the same rate as gold, and official imports in January subsequently
fell. Smugglers will surely add silver to all those secret luggage
compartments they've been using for gold.
Australia's Perth
Mint said
gold sales jumped 41% and silver 33% in 2013. In January, gold demand was up
10% and silver 8%.
Mexico's pension
funds are
now investing in gold after strict investment regulations were recently
lifted. The World Gold Council says it spoke to 10 of the country's most
influential pension fund managers (with over $160 billion in assets) and was
told that they began investing in gold and commodities in 2013.
Central banks were once again big buyers last
year. Of those that have reported so far…
- Turkey purchased 150.4 tonnes (4.83 million ounces)
- Vietnam 110 tonnes (3.53
million ounces)
- Russia 57.3 tonnes (1.84
million ounces)
- Kazakhstan 24.16 tonnes (776,762
ounces)
- Azerbaijan 16.02 tonnes (515,054
ounces)
- Sri Lanka 6.51 tonnes (209,301 ounces)
- Nepal 6.22 tonnes (199,977 ounces)
- Ukraine 6.22 tonnes (199,977 ounces)
- Indonesia 4.04 tonnes (129,889 ounces)
- Venezuela 1.87 tonnes (60,121 ounces)
And of Course, There's China…
Last year's record import
number is impressive enough, but it's the pace that's mind-blowing. 1,139
tonnes is…
- More
than 2011 and 2012 imports combined.
- Over
42% of global mine production last year.
- Roughly
twice as much as the amount GLD sold in all of 2013.
Meanwhile, Back in the Good Ol'
US of A…
Gold coin demand for 2013
jumped 24%. Some headlines have pointed out that January 2014 gold and silver
coin sales were down compared to a year ago—but January 2013 was the all-time
record for single-month sales. Further, Eagle and Buffalo gold coin sales
were more than double December's sales, and were the highest since last
April. Silver coin sales in January were almost four times more than in
December.
There, now I feel better.
Even if you sometimes
feel like a lone wolf investing in this market, understand that worldwide
demand for gold and silver bullion continues unabated. If you live in the US,
realize that people in many other countries are seeing more positive
headlines about gold, have more friends who own gold, and heck, could even
walk into a bank to buy gold.
I don't think the people
in these other countries are stupid. Whatever consequences result from the
historic levels of currency dilution across the globe, they seem as sure as I
do that they'll be good for gold.
What should you buy? I
first recommend buying gold and silver bullion to establish a financial
safety net. And then, to maximize gains on the more speculative end of your
portfolio, you should look at Louis James' just-released "10-bagger
List for 2014" in the February issue of International Speculator. A 10-Bagger is a stock with the
potential to gain 1,000% or more—that's not a typo, we really did make 10
times our money on junior gold stocks the last time the sector rebounded, and
Louis thinks that's about to happen again.
For example, one of those
prospective 10-Baggers is a junior with a multimillion-ounce gold project
that's run by one of our Explorers League honorees. This company is on the
verge of securing the funds needed to build its exceptionally high-margin
gold mine, but it's on sale. Speaking of the potential, Louis said: "If
the company delivers, it'd be easy to see these 40-cent shares trading for
$4" by 2015.
Investing in these
stocks—and there are nine of them on Louis'
list—could quite literally make you a fortune, but the opportunity to get in
on the ground floor is fading fast. Click here to learn more about Louis'
10-Bagger List for 2014—or watch the recording of our just-aired one-hour video
event "Upturn Millionaires" to learn why the time to act is now.
