Gold Is the “All Weather” Asset for Every Portfolio – Business Insider

Release Date: 
Friday, October 9, 2015

Gold and Silver Prices
Dovish minutes from the Federal Reserve sent gold prices higher on Friday to a three week high.

“Gold rose to a three-week high on Friday after minutes from the Federal Reserve's last policy meeting showed the U.S. central bank was in no hurry to raise interest rates… Prices were supported by Fed minutes released on Thursday, suggesting the central bank was deeply cautious even before last week's soft jobs data showed a sharp slowdown in U.S. hiring.

"’We still see fairly strong demand,’ said Hamza Khan, head of commodities strategy at ING Bank. ‘The stage on the fundamental side is set for higher prices and the longer the Fed holds off on a rate hike, the stronger the picture is for gold.’” (“Gold rises to three-week high on dovish Fed minutes,” Reuters, 10/9/15.)

Gold finished the week up $19.60, closing at $1,157.40. Silver prices closed the week at $15.92, up $0.62.

Gold Is the “All Weather” Asset for Every Portfolio – Business Insider
Writing for Business Insider, analyst and author Jim Rickards explains to readers how the government can create hyperinflation in 15 minutes and, with it, raise gold prices to $5,000 per ounce.

“A central bank’s worst nightmare is when they want inflation and can’t get it. The Fed’s tricks have all failed. Is there another rabbit in the hat? Actually, yes. The Fed can cause massive inflation in 15 minutes. They can call a board meeting, vote on a new policy, walk outside and announce to the world that effective immediately, the price of gold is $5,000 per ounce…

“A rise in the price of gold from $1,000 per ounce to $5,000 per ounce is really an 80% devaluation of the dollar when measured in the quantity of gold that one dollar can buy. This 80% devaluation of the dollar against gold will cause all other dollar prices to rise also. Oil would be $400 per barrel, gas would be $10.00 per gallon at the pump and so on. There it is — massive inflation in 15 minutes: the time it takes to vote on the new policy.

“Don’t think this is possible? It has happened in the U.S. twice in the past 80 years…
History shows that raising the dollar price of gold is the quickest way to cause general inflation. If the markets don’t do it, the government can. It works every time.

“History also shows that gold not only goes up in inflation (the 1970s), but it also goes up in deflation (the 1930s)… This makes gold the ultimate ‘all weather’ asset class. Gold goes up in extreme inflation and extreme deflation. Very few asset classes work well in both states of the world. Since both inflation and deflation are possibilities today, gold belongs in every portfolio as protection against these extremes.” (“Here's how inflation can happen in 15 minutes,” Business Insider, 10/3/15.)

World Economy in “Deep Trouble”; Physical Gold and Silver Are “Safest Assets” to Own - Embry
John Embry, Senior Investment Strategist at Sprott Asset Management, told King Worlds News that the world economy is threatened by financial and geopolitical crises, requiring investors to own physical gold and silver.

“… I think it is important, Eric, that your readers understand that the world economy is in deep trouble because additional debt can no longer support growth.  This point has long been forecast by those who believe in the Austrian School of economics.  The massive new quantities that have been created since the global financial crisis have done nothing more than keep the system afloat and ensure an even worse ending.

“Now compounding matters, the geopolitical front is deteriorating rapidly as well.  The U.S. looks inept on the foreign front as Afghanistan is becoming a major problem once again.  And the Middle East is a nightmare for the U.S. as Vladimir Putin has gained the upper hand with his actions in Syria.  I think it is important for people to keep a close eye on this war because it is potentially explosive.

“In closing, I must once again reiterate that physical gold and silver are by far the safest assets to hold at this point.  And their respective share possess the greatest upside potentials in the history of the sector.  The fact that very few people share this view only reinforces my resolve.” (“World Economy In Deep Trouble But It’s All Part Of The Big Manipulation,” King World News, 10/7/15.)

Gold Is Approaching Major Market Turn Upward – Gilburt
Market analyst and author Avi Gilburt explained the “herd mentality” which is bearish on precious metals signals resumption of the bull market.

“For those that remember back to 2011, as the metals were moving up in a parabolic move, everyone was on the ‘bullish team…’  But back in August of 2011, I suggested to gold investors to sell their gold at $1,915, and silver investors to begin to set up a short trade on silver.  I also suggested that gold can drop as low as the $700-$1,000 in the up-coming correction I was expecting…

“It finally seems as though the public sentiment, as evidenced by commenters to recent articles, has finally done a complete shift since the 2011 highs... Sadly, what these commenters don’t recognize is that they are quite representative of the herd, and the herd’s ‘feelings’ are always leaning in the wrong direction when we approach market turns, especially when there is a strong consensus within the herd.  Yes, the herd has now become quite bearish of the metals market.  And, in the same way that they were too bullish back in 2011, I think, at least from an anecdotal perspective, we are quite close to the point of them being too bearish in 2015, which likely means we are approaching a major market turn.” (“Confessions of a Gold Analyst: How The Metals Market Has Come Full Circle,” Kitco News, 10/7/15.)

Gold Provides Independent Monetary Wealth – Bryan
Analyst David Bryan just apposed gold and the fiat currencies he deems to be “paper Ponzi.”

“The future direction of the planet is a choice between independent money and the central bankers counter-party paper Ponzi. Gold is independent monetary wealth with incredible wealth value that cannot go broke and over time will progress in value…

“Gold is independent monetary wealth. Gold is mined from ore and has incredible value as refined natural physical wealth; Gold does not have a national currency and has wealth value beyond national boundaries. It has monetary wealth for people everywhere in the world; Gold is the mortal enemy of central bankers. It is an independent monetary asset that would prevent central bankers from using their Ponzi counter-party paper to exclusively manage, control and centrally plan the economy;

“Gold cannot be printed into existence. It does not have or need the artificial risks from using the central banker’s Ponzi of counterparty liability finance; Gold or silver have been used over several thousand years as wealth assets by every country in the world, to guarantee the independence and monetary value of their currencies.

“Gold is independent money with incredible wealth value that cannot go broke and will over time progress in value… Gold is independent monetary wealth that has increased 5000% since the Federal Reserve Bank was formed in 1913... Gold is indestructible and has a lasting monetary store of value that safely protects wealth for generations to come…” (“Gold Money Versus Central Banks Paper Ponzi,” Gold-Eagle, 10/7/15.)

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†This material has been prepared for private use. Although the information in this commentary has been obtained from sources believed to be reliable, Goldline does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice.

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