Thursday, January 19, 2012

Gold & Silver The Legacy RRSP Assets For All Generations

"Gold is money, everything else is credit."
James P. Morgan

For twelve years gold and silver have been in a bull market. Gold has shown an average annual return of approximately 20% per year, even when measured in various global currencies, it has outperformed every other asset class in the past decade. The 70's saw gold rise from $35/oz to a high of $850/oz in 1980, that's a multiple of 24 times. Applying that multiple in this decades bull run, it would take gold from a low of $250/oz in 1999 to a high of $6,000/oz! With gold trading in the $1,650 range today, we're not even close to "BUBBLE" territory or a peak in gold.  Just ask yourself how many people you know that own gold bullion, and I don't mean ETF's, paper certificates or trusts, but the actual physical bullion? Probably very few? Besides the global economy was much different in the 70's. Chinese and Russian citizens were not even allowed to own gold. Now, China is actively promoting gold investments to its citizens. The USA was a creditor nation, now it's the largest debtor nation in the history of the world, with debt exceeding, hold on to your hats...$15 TRILLION! The problem is many fail to realize this bull market in gold is not about gold, it's about the USD losing confidence as the world's reserve curreny. Throughout history many countries have lost this status, from the great Roman times to the British empire. Paper currencies always, and without fail, eventually return to their intrinsic value of ZERO. However, gold is actually insurance and a true measure of wealth, that cannot be challenged. It has outlasted every government, currency, bank or stock market that has ever existed. Gold is the only unit of measure or medium of exchange that has survived throughout history as money. WHY, because of its natural composition. Gold cannot be destroyed, cannot be counterfeit, has no counterparty risk, cannot rust or tarnish, it's evenly divisible, fungible, transportable, very rare, globally recognized as a store of value and it takes real labout to produce, unlike paper or digital currencies created by central banks. Yes, of course gold and silver do not produce interest or dividends, but they're not supposed to because they are a unit of account, a measure of real wealth or MONEY! Besides, take a look at your "balanced and diversified" portfolio and compare it to gold & silver and the "cost of living," and ask yourself if you're doing any better? Gold is the only true method of protecting your wealth from the continuous inflationary policies of all central banks printing money and expanding credit. Besides, central banks keep gold in reserve, why not YOU!
The secret to everlasting wealth...
become your own central bank!

Consider this:
In 1970 $35 buys 1oz of gold or 140 loafs of bread.
In 2012 $35 buys 0.02oz of gold or ONLY 10 loafs of bread.
However, 1oz of gold today ($1,650) buys 470 loafs of bread. So what is a true STORE OF VALUE for any generation?