Lear Capital: The Cliff, the Crash and Gold

 
on December 03 2012 1:04 PM

We are all too familiar with Goldfinger, the Academy Award-winning James Bond flick that was all about an insidious effort to control the world supply of gold and its value.  “Value.”  That is the key word here.  The entire world looks at gold as the great preserver of wealth and protector of the value of our dollar and the world’s currencies.

Yes, despite reports that gold has become an ancient relic of an investment, gold is still viewed by the world as real money – a tangible asset that can never be worth zero.  And, as we watch the uncertainties of the fiscal cliff inch closer, cringing at the thought of a recession, we can’t help but be happy for what could happen to the value of gold.

Whether we plunge over the cliff or skid to a stop short of the cliff’s edge, gold is in position to be the last investment standing.  Just listen to both sides.  One says the plunge will kill the economy, the other says higher taxes, on the so-called “rich,” will kill the economy.  If you hear those messages in harmony, there is no solution and we’re just plain screwed.

Disposable income will vanish at the drop of the “ball” and the lifeblood of the economy will become a toxic pool of failed political rhetoric.  The markets will get crushed, the middle class will engage in mortal combat to survive and the recipients of government handouts will become lifetime wards of the state, dependent on government for every necessity of life.  How will you survive?

Perhaps the answer to this question can be discovered by observing the investment activity of the mega rich and powerful.  I would say a central bank is pretty powerful and according to GFMS, a London-based researcher, Central Bank Gold purchases in 2012 will increase to 493 tonnes as compared to 457 tonnes in 2011.  Now, when the people in control of the money supply are buying gold, don’t you think you should own some too?

The BRICs are another group of investors trying to accumulate more and more gold.  Brazil, reportedly, just made its first significant gold purchase in more than a decade.  Vladimir Putin is reported to be “frantically stockpiling gold”, while India and China both vie for position as the world’s largest gold consumer.  Hmmmm…..

Then there’s those obnoxious billionaires who just got lucky at the investment dartboard and believe gold diversification is an absolute necessity and… they are gold buyers.  Billionaires John Paulson and George Soros are among them.  Sheeesh!  What could they possibly know that you don’t?

As for me and my house and my precious metal’s IRA, I can only smile at the potential for gold and silver ahead.  I can’t believe how bipartisan I have become.  I want both sides to win.  I don’t want anyone to lose.   That’s why I believe now — more than ever — it is time to follow the lead of the mega rich and powerful and seize your share of control over the world’s supply of gold.

But, as always, this is just my opinion and there’s more where this came from.  Last investment standing wins!!

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