People get very emotional about Gold. Liberals hate it because they hate anything that Big Government doesn’t produce. And government can only produce fake Gold in the form of trillions of dollars of paper money backed by nothing.
Conservatives love Gold, because it is the only real money – and it (along with Silver) is the only constitutional money. (Conservatives like the Constitution.) And Conservatives appreciate Gold because it is sound money, and they know that until we have sound money again, our nation will never get out of debt.
For the last 12 years Gold has been rising steadily as the major governments of the world have been using the “printing press“ to try to solve their financial problems. As more dollars, euros, and pounds are printed, the price of Gold has risen in relation to these currencies.
Central to our understanding of the precious metal is the principle that, in the short term, Gold moves on emotions, but in the long term it moves based on fundamentals – in particular, the amount of worthless currency being printed. I have read the opinions of various pundits attempting to explain why Gold and Silver have dropped so significantly recently, and for which there appears to be no plausible reason that I can see other than emotions. The long-term fundamentals remain clear: The U.S. and most world economies are being decimated by overwhelming debt.
Today I was looking at the charts of Gold and Silver bullion and of precious metals mining companies. All have dropped dramatically in the last month. Gold is down 26.5% from its 2011 high. Silver is down 52.7% from its high. And mining stocks are down as much as 50% just this year. Many, like bellwether Barrick Gold Corporation, are down close to 70% since their 2011 highs.
But IGG (Investment Grade Gold) hasn’t budged. I’m not the type to say, “I told you so,“ but those of you who have attended my Christian Financial Concepts webinars and read my articles know that I have been warning for years that bullion and precious metals mining stocks are not the way to invest in Gold or Silver. Although I do believe that everyone should have some Gold and Silver bullion (as outlined in my article, the 10-10-10 Financial Survival Plan), I have always cautioned that bullion is not an investment. The purpose for owning bullion is strictly protection from inflation, because it goes up as currencies go down. High grade Investment Grade Gold (IGG) both protects money and grows in real value (far more than inflation). In fact, over the last 40 years it has outperformed bullion by seven times.
If you haven’t already done so, watch my video, “Why Investment Grade Gold is Better than Bullion“ in the Videos section of www.GoldenArtTreasures.com. It explains why all of the various assets – except IGG – have had down years in the last 100 years. The stock market has been down one third of the time – 33 down years in the last 100 years. Treasury yields have been down 47 years; Real Estate has dropped in 51 of the last 100 years. Even bullion Gold and Silver have had down years. But high grade IGG Gold and Silver coins have not been down one year of the last 100. That’s not to say they couldn’t have a down year next year. But personally, I would rather buy IGG than bet on an overextended stock market that has lost money in one out of three years!
Will Gold rise in the future? The answer is absolutely “yes.” Gold can be legitimately called a guaranteed safe investment, because the U.S. Government has stated its intention to continue running large deficits. And historically, as the National Debt has risen, the price of Gold has always risen along with it. But while I believe Gold bullion will go higher, I also believe that Investment Grade Gold is a safer Gold investment that everyone should consider. Unlike Gold bullion, the type of rare Gold coins that I buy goes up even in years that bullion goes down.
Two of the worst years in U.S. history were 1913 (when the Federal Reserve System was founded) and 1933 (when FDR took us off the Gold Standard). Since then the U.S. dollar has lost 96% of its value, and Gold has increased in price by 70 times (even at today’s low spot price). Obviously, if we are ever to reduce our massive National Debt, our nation desperately needs to return to the Gold Standard. However, that would require politicians with enough guts to say, “You’re going to have to get by with less free stuff from the government.” (Good luck with finding politicians with the guts to tell people that!) Even in a scenario of government deciding to tighten its belt, we have enough Gold to cover a paltry 3% to 4% of the trillions of worthless dollars the U.S. has printed.
So, if we can’t get the nation back on the Gold Standard, what can we do? I suggest that the solution is to put our families, our churches and our charities on the Gold Standard.
If this resonates with you, you can find “The 10-10-10 Financial Survival Plan” article, the “Golden Art Monograph, the video I mentioned above, and numerous other videos in the Articles and Videos sections of www.GoldenArtTreasures.com. You can also write to me and request the “Gold Education Starter Package.” It is a complete educational package that includes well-written articles and well-researched videos that will help you protect your family.
Though some may buy Gold out of fear, I never do. I buy Gold because it is a reasonable response to the precarious situation in which we have been placed by Big Government. If you don’t have Gold in your portfolio, do the research. You’ll probably end up asking yourself, “Why haven’t I considered this before?”