Why Gold and Gold Stocks May Be You Best Investment
By Jon Wilmott
Make no mistake, the currency crisis is coming. The dollar devaluation is actually already happening. The dollar has actually been losing it's value before 1971 but was accelerated after the U.S. left the gold standard in 1971. The situation in 2011 may be a precursor of what happened in other countries. It could happen in America.
Rather than sitting back and letting it happen, protect yourself and profit from an economic upset that could basically render your dollars about as worthless as the paper they're printed on. We saw a preview of this kind of debacle quite recently. In early 2006 a currency plunge triggered an avalanche of sell orders in emerging markets from Brazil to Indonesia. The Icelandic krona plunged nearly 10 percent in only two days, dragging down Icelandic stocks and bonds with it and subsequently spread to Brazil, Mexico, Poland and Turkey.
A precursor to this was the Asian Currency Crash of 1997, which sent stocks south like ducks in winter. Banks, insurance companies, real estate and bonds also fled the scene. The only viable option left was gold. In the event of another such decline in currency values, gold will be worth at least 10 times its current value.
How is this possible? Simple: Since gold cannot be made or printed at the whim of greedy politicos, it can't be devalued as quickly as the paper money that is printed whenever need arises. When a currency is backed by gold, $1 in paper money has to be backed by approximately one dollar's worth of gold. Once a currency is no longer backed by gold, governments can print as much as needed. Naturally, most world governments have gone off the gold standard and that is why paper money has no intrinsic value. As a result, most major institutions only speculate short term between those currencies and associated local values, such as stocks or bonds, and then they convert their profit into gold.
So how can a small investor invest in gold to protect themselves from the dollar or currency devaluation? The easiest way it to buy physical gold by way of coins, small ingots or even gold bars. This physical gold is preferable to a paper gold in stocks, mutual funds or exchange traded funds knows as ETFs. Alternatively, there are closed-end funds and ETFs that will redeem your shares into physical gold or silver. Sprott funds from Canada is a respected firm that will do this as well as the closed-end Central Fund of Canada (CEF).
The next option is to buy gold or precious metals mutual funds or ETFs. Investors can also consider gold mining companies which are usually divided between large miners and smaller more specualtive mining companies. When analyzing gold stocks, a good investment software program or stock software program can be helpful. Gold stocks can be very volatile and investors can profit using technical analysis in stock software programs. We view large gold mining companies as they have reserves is a real currency that is valuable. This contrasts with banks today that have what many think as worthless paper and potentially worthless loans and derivative securities on their balance sheet. Large gold mining companies own something tangible that also creates income.
Rather than sitting back and letting it happen, protect yourself and profit from an economic upset that could basically render your dollars about as worthless as the paper they're printed on. We saw a preview of this kind of debacle quite recently. In early 2006 a currency plunge triggered an avalanche of sell orders in emerging markets from Brazil to Indonesia. The Icelandic krona plunged nearly 10 percent in only two days, dragging down Icelandic stocks and bonds with it and subsequently spread to Brazil, Mexico, Poland and Turkey.
A precursor to this was the Asian Currency Crash of 1997, which sent stocks south like ducks in winter. Banks, insurance companies, real estate and bonds also fled the scene. The only viable option left was gold. In the event of another such decline in currency values, gold will be worth at least 10 times its current value.
How is this possible? Simple: Since gold cannot be made or printed at the whim of greedy politicos, it can't be devalued as quickly as the paper money that is printed whenever need arises. When a currency is backed by gold, $1 in paper money has to be backed by approximately one dollar's worth of gold. Once a currency is no longer backed by gold, governments can print as much as needed. Naturally, most world governments have gone off the gold standard and that is why paper money has no intrinsic value. As a result, most major institutions only speculate short term between those currencies and associated local values, such as stocks or bonds, and then they convert their profit into gold.
So how can a small investor invest in gold to protect themselves from the dollar or currency devaluation? The easiest way it to buy physical gold by way of coins, small ingots or even gold bars. This physical gold is preferable to a paper gold in stocks, mutual funds or exchange traded funds knows as ETFs. Alternatively, there are closed-end funds and ETFs that will redeem your shares into physical gold or silver. Sprott funds from Canada is a respected firm that will do this as well as the closed-end Central Fund of Canada (CEF).
The next option is to buy gold or precious metals mutual funds or ETFs. Investors can also consider gold mining companies which are usually divided between large miners and smaller more specualtive mining companies. When analyzing gold stocks, a good investment software program or stock software program can be helpful. Gold stocks can be very volatile and investors can profit using technical analysis in stock software programs. We view large gold mining companies as they have reserves is a real currency that is valuable. This contrasts with banks today that have what many think as worthless paper and potentially worthless loans and derivative securities on their balance sheet. Large gold mining companies own something tangible that also creates income.
About the Author:
Want to find out more about stock software, then visit Jon Wilmott's site on how to choose the best trading software for your needs.
Posted by Oriflame Indonesia at 1:20 AM
Subscribe to:
Post Comments (Atom)
0 comments:
Post a Comment