Folks, I must admit that every time I see the heading "God and you" in a Goanet post, I get excited.
I open that post expecting to read something from the material world but then realize, once again, that it is Albert writing more on "God and you' and not on "Gold and you" as my pre-conditioned eyes had expected. So, since I have a few minutes to kill before I walk over to my neighbours for another Xmas celebration, let me write a few words about my favourite subject. This decade has been the worst ever for the US stock market. In 180 years of its existence, the only decade the US stock market had a negative return was during the depression decade of the 1930's. The returns of the last ten years are on track to be worse than the returns of the 1930's. For those of you who are not aware of it, checks and balances that were put in place in the US financial system after the 1930's depression, were removed by George Bush (43) which led to a repeat collapse of the US stock market. In addition, the current US administration is practising a type of capitalism where any company can be deemed to be "to big to fail." Just like the USSR, these money losing companies are given taxpayers money to continue operating at a loss and to produce goods that no one wants to buy. On the other hand, countries that kept the depression period checks and balances intact, had positive returns on the stock markets this decade. I earn my living in the Canadian mutual fund industry. Canadian financial institutions are still ranked number one in the world. These institutions are strong only because they had to adhere to strict Govt regulations. As such, any Canadian who invested $100 in the Canadian stock market at the beginning of this decade, would now have $170. The Canadian who invested $100 in the US stock market would have, because of the depreciation of the US dollar and the collapse of its stock markets, $66. A Canadian who invested CAD$100 in gold at the beginning of this decade would have CAD$285. Any person who invested US$100 in gold at the beginning of this decade would now have an investment worth at least US$380. Where is the price of gold heading to in the next decade? Up. For only one reason. Inflation. The US is essentially broke. It cannot raise taxes to pay for basic Govt expenditure. In order to pay its bills, the US govt is printing money. Every first year student in economics knows that when you increase the supply of money, its value decreases. Inflation soon kicks in. When it does, everything that is priced in US dollars will cost more in US dollars. If for what ever reason you cannot invest in gold, get your investment adviser to talk to you about other commodities that are priced in US dollars. For example, energy, ore and metal produces now have tremendous potential for appreciation. Lastly, inflation will not last forever in the US. Once it is under control, the price of gold and other commodities will drop. There is a lot of money to be made too when this happens, in the later part of the next decade. MervynD'thruLobo __________________________________________________ Do You Yahoo!? Tired of spam? Yahoo! Mail has the best spam protection around http://mail.yahoo.com
