{"id":29302,"date":"2012-04-26T03:23:13","date_gmt":"2012-04-26T07:23:13","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/2012\/04\/why-gold-is-hands-down-the-best-money-you-can-buy\/"},"modified":"2012-04-26T03:23:13","modified_gmt":"2012-04-26T07:23:13","slug":"why-gold-is-hands-down-the-best-money-you-can-buy","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2012\/04\/26\/why-gold-is-hands-down-the-best-money-you-can-buy\/","title":{"rendered":"Why Gold is Hands-Down the Best \u201cMoney\u201d You Can Buy"},"content":{"rendered":"

By MoneyMorning.com.au<\/a><\/strong><\/p>\n

Here\u2019s a surprise\u2026<\/p>\n

\n

\n \u201cWe remain entirely prepared to take additional balance sheet actions as necessary to achieve our objectives.Those tools remained very much on the table and we would not hesitate to use them should the economy require that additional support.\u201d<\/em><\/p>\n<\/blockquote>\n

Those are the words from Dr. Ben S. Bernanke<\/a>, Chairman of the U.S. Federal Reserve.<\/p>\n

Of course, it\u2019s not really a surprise.You\u2019d have to be a certified idiot not to think the Fed and every other central bank is poised to pounce if their economies start to falter.<\/p>\n

<\/span>
\n Here in Australia there are plenty of calls for the Reserve Bank of Australia (RBA) to drop interest rates to help the economy\u2026 even though Australia is supposedly the best economy in the world\u2026 ever!<\/p>\n

But we try not to dwell too much on what the central bank clowns are doing.Because as we point out in this special presentation<\/a>, \u201cNone of it matters.\u201d<\/em><\/p>\n

That said, you still need to take some notice. Because there are some markets where it does<\/em> matter what the Fed does\u2026<\/p>\n

A Battle of Attrition<\/h3>\n

<\/center><\/p>\n

We\u2019re talking about precious metals like gold<\/strong>.<\/p>\n

After soaring from AUD$1,378 to AUD$1,806 an ounce last year, gold has moved into what we can only describe as a painfully boring sideways trading range.<\/p>\n

You can see the proof on this chart:<\/p>\n


\nSource:<\/em> goldprice.org<\/strong><\/center><\/p>\n

\n Anyone who bought gold during the past 10 months is under water.<\/p>\n

The gold market has moved into the phase that follows a boom and bust. It\u2019s the battle of attrition.<\/p>\n

You see it in all markets. It doesn\u2019t matter if it\u2019s stocks, bonds, property or anything else. The market follows the same pattern: boom, bust and then a grinding and painful sideways movement.
\n (By the way, that\u2019s why we\u2019re still calling for the Aussie housing market to fall<\/a> further. Its had the boom, and contrary to what the spruikers claim, the market isn\u2019t in the recovery phase yet\u2026 it\u2019s still in the bust phase!)<\/p>\n

What happens during this market phase is the part-time gold investors sell out. They never really believed in the real value of gold<\/a> to begin with.<\/p>\n

They only bought because like all booms, they feared missing out.
\n So with the gold price<\/a> hitting the skids (it\u2019s down 12% from the top), those part-timers begin wondering why they bought gold.
\n They see the price moving sideways and the words of billionaire investor, Warren Buffett<\/a> start ringing in their ears.To paraphrase, \u201cGold does nothing and it earns nothing.It\u2019s useless.\u201d<\/em><\/p>\n

So, they sell.<\/p>\n

But it\u2019s not just the part-timers.Even the gold bulls<\/a> and gold bugs apply some selling pressure too. While they may be bullish on gold, even they start to wonder if the price was over-cooked.So they sell a bit of the shiny stuff too\u2026 or at the very least, they may hold off on buying more until they see the price fall further.<\/p>\n

That said, what is the future for the gold price? And as an investor, what should you do about it?<\/p>\n<\/p>\n

Don\u2019t Bank on a Gold Standard Just Yet<\/h3>\n

<\/center><\/p>\n

Well, while you need to keep a close eye on what the central bankers are up to, our \u201cNone of it matters\u201d<\/em> mantra also applies to gold.<\/p>\n

Long term we know the current monetary system is unsustainable.That at some point (maybe sooner than we think), there will be a major change to the global banking system.<\/p>\n

And that will have a huge effect on the gold price.<\/p>\n

But that doesn\u2019t mean central banks will turn to gold to back their currencies. Not yet anyway. More likely is an intermediate step that some are already talking about.<\/p>\n

That is, replacing the U.S. dollar as global reserve currency with a basket of currencies. This \u2013 supposedly \u2013 will provide more stability to currency markets and reduce the impact of one country acting irresponsibly by racking up excessive debts and printing money<\/a>.<\/p>\n

Of course, that\u2019s rubbish. If you peel back the layers you\u2019ll see it\u2019s not the U.S. dollar that\u2019s the problem, it\u2019s the faith in paper currencies.<\/p>\n

So replacing one paper currency<\/a> with many paper currencies isn\u2019t a solution.<\/p>\n

The impact on gold?<\/p>\n

Will Aussie Dollars Exist in 2022?<\/h3>\n

<\/center><\/p>\n

What should soon become apparent to the mainstream is what they see as gold\u2019s faults and limitations (it doesn\u2019t do anything), is actually its virtue.<\/p>\n

Gold<\/a> doesn\u2019t do anything.<\/p>\n

It can\u2019t do anything.<\/p>\n

It\u2019s inanimate.<\/p>\n

That while thousands of bureaucrats and bankers have spent years and millions of hours trying to prop up and manipulate the value of paper currencies, a bar of gold in the future is the same as a bar of gold today.<\/p>\n

It won\u2019t have changed.<\/p>\n

But that realisation won\u2019t happen overnight.It may take many years.That\u2019s why you should almost ignore the daily price action for gold. As Greg Canavan points out in another of today’s articles, the market price for gold is heavily manipulated<\/a>.<\/p>\n

But even so, what doesn\u2019t change is gold\u2019s worth as a store of value<\/a>.With everything that\u2019s happening in global markets with the manipulation of national currencies, can you really be certain that Aussie dollars, euros, U.S. dollars and British pounds will still be around in 10 year?<\/p>\n

We can\u2019t.<\/p>\n

Yet we\u2019re 100% certain that gold will still be around in 10 years<\/em>.And that, regardless of what has happened to the price over the past 10 months, still makes it the best \u201cmoney\u201d you can buy.<\/p>\n

Cheers.
\n Kris<\/strong><\/p>\n

From the Archives\u2026<\/em><\/strong><\/p>\n

Small Caps \u2013 A Way to Bet on Developing Markets\u2026Without Investing Overseas<\/a>
\n 2012-04-013 \u2013 Kris Sayce <\/p>\n

All Transactions to be Conducted in the Presence of a Tax Collector<\/a>
\n 2012-04-12 \u2013 Simon Black <\/p>\n

How You Can Use Government Intervention to Profit on the Stock Market<\/a>
\n 2012-04-11 \u2013 Kris Sayce <\/p>\n

Australia \u2013 The Pacific Pawn in USA Versus China<\/a>
\n 2012-04-10 \u2013 Dr. Alex Cowie <\/p>\n

If Ron Paul Were US President\u2026<\/a>
\n 2012-04-09 \u2013 Mark Tier <\/p>\n

\n<\/img><\/a> <\/img><\/a> <\/img><\/a>\n<\/div>\n


\nWhy Gold is Hands-Down the Best \u201cMoney\u201d You Can Buy <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By MoneyMorning.com.au Here\u2019s a surprise\u2026 \u201cWe remain entirely prepared to take additional balance sheet actions as necessary to achieve our objectives.Those tools remained very much on the table and we would not hesitate to use them should the economy require that additional support.\u201d Those are the words from Dr. Ben S. Bernanke, Chairman of the … <\/p>\n

Continue reading “Why Gold is Hands-Down the Best \u201cMoney\u201d You Can Buy”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-29302","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/29302","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/comments?post=29302"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/29302\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=29302"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=29302"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=29302"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}