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We are told each and every day that smart
investors are buying gold in order to be prepared for the coming
crisis and likely inflation. |
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But, when the crisis hits -- with or without
inflation -- what are we to do? |
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The promoters of the buy-gold strategy
apparently expect us to trust that they will, amidst a crisis,
simply give us the then-recent, top dollar for our gold, thereby
ensuring that we will survive the crisis. |
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| When a
genuine crisis hits, you
may need to sell
the gold you have been accumulating while you
were preparing for the crisis. |
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| But will the
market for gold be generous and liquid? |
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When a crisis is seen by enough people, the
market price of gold will,
after its initial upward reaction, drop.
Potential buyers will understand that many
people will need to, or want to sell gold. |
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They will know that
potential sellers are desperate to sell along with many other
hoarders and collectors of gold.
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Do you believe that the potential buyers of gold
will pay you a recent high price? They will not. They will not
aggressively buy when the crisis hits. They will wait, allowing a
large sell pressure to accumulate. That sell pressure created by the
many people who bought into the buy gold strategy will drive down
the market price of gold. |
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The number of sellers factored into the quantity
for sale will result in a downward price trend. There will be more
selling pressure than buying pressure. Therefore, the market
price of gold will likely decline
amidst a crisis. |
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| Who will want to
buy gold in such a time? |
| The
majority of people buying gold amidst a
crisis will be those who have money. But
they will not pay you the old market price for your gold. They will
wait and wait and wait until you and others like
you are truly desperate. While they wait
to buy, desperate gold holders will sell. |
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While you wait, the price will decline.
Eventually the gold buyers will do
you a big favor. They
will buy your gold for less than the prior
period's gold promoters were selling it
for. |
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When a crisis hits, people will ask why they had
expected yesterday's gold promoters to give them top dollar during a
time of crisis? |
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| What will you
want in return for the gold you had been hoarding? |
| You
will want -- and need -- something of
value. But that something must be fungible or
directly useful. It must either be,
or be easily converted into bread, butter,
fresh water, living space, and personal
safety, and more. |
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You might have food, shelter, and safety already
if you had planned ahead. If you had placed your money in fungible
assets that tend to be desirable themselves during a time of crisis. |
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Gold is neither edible nor fungible. It must be
used to obtain fungible and directly useful assets and commodities. |
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Who? |
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Potential crisis era gold buyers will be
those holding that
supposedly deflating, old stuff
known as money. That is, that stuff that
you so desperately want to give away today
in exchange for gold. |
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| A
crisis is a crisis for everyone. Those who profit during a crisis
will possess the more
valuable and easily fungible
assets. Not gold. |
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New IRS Control Uncovered |
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It was recently revealed that Obamacare, the new
health care insurance mandate legislation, has an interesting
provision imbedded in its 2,300 pages. |
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This provision requires that all gold sales and
purchases valued over $600 must be reported to the IRS. |
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Apply this new IRS control to your portfolio and
related transactions in order to determine additional liability and
liquidity issues. |