It is the silver and gold lining of the dismal and imploding economy.
The longer that central banks force negative interest rates – and wipe out
the value of savings, pensions, and insurance accounts by denying them return
on investment – the more attractive gold and other commodities become as a
safe haven for maintaining flexibility.
Moreover, the closer the system comes to unraveling altogether, gold
and silver remain attractive as a means of holding onto money with ready,
liquid exchange value.
If hyperinflation were to make the dollar virtually worthless overnight,
or if cash controls were imposed to limit people to a paltry daily allowance
from ATMs and prevent bank runs, physical commodities can still be used.
Financial analyst John Rubino, of DollarCollapse.com discusses the
importance of physical holdings in this interview with Greg Hunter of USAWatchdog.com:
via Greg
Hunter:
John Rubino, who was a former Wall Street analyst, says
negative interest rates will be good for gold and silver.
Rubino explains, “It used to be that if you were going to buy gold and store
it in a vault, you would have to pay maybe 1% a year. You wouldn’t generate
any cash flow from it. Meanwhile, a portfolio of Treasury bonds might yield
you 6% a year. So, there was a big gap in cash flow between financial assets
and real assets. That’s gone now in a world of negative
interest rates. It actually costs you money to own Japanese or German bonds,
whereas gold is still what it always was. It sits there and retains its value
while your bond portfolio actually loses value. You
pay rather than receive interest.
So, this is a phenomenally good environment for precious
metals, and that ought to play out over time. In other
words, money ought to flow into those sectors, gold and silver, as the next
few years progress. They are tiny little sectors compared to financial
assets, in general. If just 1% of investable assets flowed into precious
metals, it would send them through the roof. There is so much more paper out
there than gold and silver.”
While the system flirts with total disaster, there is actually opportunity
for gold and other commodities. Storage fees are now cheap compared with the
loss of funds that negative rates are costing financial market investors.
John Rubino sums it up this way:
“The money bubble is basically the big bubble, the one from which all
other bubbles have come and gone. And the money bubble is about money, and
government debt and financial instruments in general. It’s a global bubble
that’s bigger than anyone before it, and that’s part of the reason that it
has gone on so long, because everybody is participating; every central bank
is armed with an unlimited printing press and it allows them to fool people
by manipulating interest rates and lately buying equities and unlimited
numbers of bonds. And that fools people into thinking the world is
basically normal, when it’s not normal because debt is soaring, and
financial leverage in every other aspect is going through the roof.”
“We’re creating conditions, really, for the mother of all crises.
It has taken longer than it seemed a few years ago, but it is starting to
happen. The QE programs of the last few years, which were wildly
experimental and really shocking to economists and everyone else, turned out
not to work…. The system is either getting ready to breakdown shortly, or to
go on to a new level of experiments that are going to be even more dangerous
and set the stage for an even bigger crisis in the future. So that’s the
question, when does this blow up? Either way, the current system is toast . The
investment thesis of getting into precious metals and other real assets,
rather than financial assets, stands. And it’s going to work eventually.”
While huge tectonic movements are in fateful action, and central banks are
printing us into a nightmare, individuals can hold relatively steady by
simply being prepared, and taking advantage of the foresight they have gained
by paying attention.
Prepare enough food, supplies, medical equipment and self-defense measures
to ensure your physical survival, and consider commodities and alternate
currencies in that strategy.
Consider how much you want to hedge in precious metals, and how you plan
to store it, and access it in the event of a collapse or other crisis. Small
units may be more tradable; silver holds that advantage, but will take up
more space, and is a heavier currency to carry.
The future of currency and central banks is uncertain at best, and likely
yields an eventual precipice from which we cannot return, but which we can
easily fall over into the abyss. Stay vigilant!
Read more:
Germany’s Largest Bank Refuses “Deliveries of Physical Gold”
After Customer Request
The Ultimate Call: Will Federal Reserve Be Caught Without
Gold in ‘Repatriation Rush’?
The Yuan Ascends to World Reserve Status: “Dollar System
Being Done Away With”
Billionaire George Soros Dumps 37% of Stocks To “Buy Up
Massive Amounts of Gold” But Why?
