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For six years straight, the Fed has been trying to “trash” cash.
First it cut interest rates to zero… making it so that savings deposits
produced almost nothing in the way of interest income. Consider that at
current rates, a retiree with $1 million in savings earns a measly $2,500 per
year in interest income.
The Fed’s hope was that by making it painful for savers to sit in cash,
said savers would move into risk assets such as bonds and stocks. This has
worked in that stocks are now in one of, if not THE biggest bubbles in
history… while bonds are trading at yields never before seen outside of
wartime.
However, the Fed overlooked two outlets for investors who didn’t want to
be forced into risk. They are: Gold bullion and physical cash.
Bullion and Cash represent two of the best means of “getting your
money” out of the system. They are a way of saying “no” to Central Banking
madness (at least unless hyperinflation sets in).
How is this?
Warren Buffett once noted, Gold doesn’t do anything “but look at you.” It
doesn’t pay a dividend or produce cash flow. However, the fact of the
matter is that Gold has dramatically outperformed the stock
market for the better part of 40 years.
I say 40 years because there is no point comparing Gold to stocks during
periods in which Gold was pegged to world currencies. Most of the analysis I
see comparing the benefits of owning Gold to stocks goes back to the early 20th
century.
However Gold was pegged to global currencies up until 1967. Stocks
weren’t. Comparing the two during this time period is just bad analysis. And
once the Gold peg officially ended with France dropping it in 1967, the
precious metal has outperformed both the Dow and the S&P 500 by a massive
margin.
See for yourself… the below chart is in normalized terms courtesy of Bill
King’s The King Report.
According to King, Gold has risen 37.43 fold since 1967. That is more than
twice the performance of the Dow over the same time period (18.45 fold).
So much for the claim that stocks are a better investment than Gold
long-term.
Indeed, once Gold was no longer pegged to world currencies there
was only a single period in which stocks outperformed the precious metal. That
period was from 1997-2000 during the height of the Tech Bubble (the single
biggest stock market bubble in over 100 years).
In simple terms, as a long-term investment, Gold has been better than
stocks.
As for physical Cash…
The US Dollar actually returned the same amount as stocks in 2014.
Those investors who simply put their money in cash saw their wealth increase
the same amount on a relative basis as those who stomached the stock market
roller coaster.
This is not changing. In fact, those sitting in cash have made even MORE
money this year than those who own stocks. Even with the correction in the US
Dollar, it’s massively outperforming the stock market.
This has infuriated the Fed and is forcing it to take more and more
aggressive measures to trash cash.
Indeed, we've uncovered a secret document outlining how the Feds plan to
take hold of savings during the next round of the crisis to stop individuals
from getting their money out.
We detail this paper and outline three investment strategies you
can implement right now to protect your capital from this sinister plan in
our Special Report
Survive the Fed's War on Cash.
We are making 1,000 copies available for FREE the general public.
To pick up yours, swing by….
http://www.phoenixcapitalmarketing.com/cash.html
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