There are unpredented things happening in the world economy, investment, banking and commodity markets. Want to know why?
The world’s largest countries have deployed a strategy of inflating their economies for the last several decades. Unfortunately when you do that, excesses get built into the prices of things like stocks (remember the Dot Com bubble?), commodities, real estate and so on. However the excesses have never been allowed to correct properly. As a result the over bloated western economies are dealing with a Great Correction as Bill Bonner says in his Daily Reckoning. That means the governments are trying to stimulate an economy by continuing to inflate it by stimulus measures but it’s not only not having any effect, but it’s causing a misallocation of capital and some unintended consequences. The most obvious unintended consequence is uncertainty in investment markets. As a result money is moved out of nearly all classes of assets… but guess where it goes? US Treasuries of all places!!! This is dumbfounding given the state of the US economy and finances. In many respects they are exactly like Greece! Wow! SO WHAT DO YOU DO?
Sooner or later, the debt that has been used as stimulus will have to be monetized or turned into cash by the governments and that by definition (ie an increase in the money supply) is inflationary. It also means that currencies will devalue as their value erodes. Since no one knows when that will be but that it will happen, you have to buy gold and silver bullion primarily to protect yourself. “But Mark”, you say,” Gold is going down too”. Yes it’s going down now because it’s been speculated upon and those people are taking out profits now. However as the economies muddle through or decline more, bullion prices will continue to soften, making it a great time to start accumulating it. Don’t try to time it. Remember, buy bullion as a safety measure first. Also remember, given the unprecedented times that we are in, there could be any number of events that cause more uncertainty. Nasim Taleb calls them ” Black Swans”. Become familiar with that term. Call me to find out how to protect yourself, I can help.
