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Gold no longer has a legal role in the world's monetary system, but gold, throughout the centuries, has performed two jobs that today's fiat, paper money, or any other financial innovation, cannot do;
- Gold acts as a safe haven in times of turmoil - to escape Nazi Germany, or buy food and water in a crisis
- Gold preserves your purchasing power - in 1913 (the year the US Federal Reserve was born) the US dollar was, well, a dollar, gold was US$20 an ounce. Today, at almost the 100 year anniversary of the Fed the dollar has lost 95 percent of its purchasing power and gold is almost $1700 an ounce
“…our experiment in democracy could be closed down by a process of erosion…Early on, as WH Auden put it, the horror is always elsewhere - while someone is being tortured, children are skating, ships are sailing: "dogs go on with their doggy life ... How everything turns away/ Quite leisurely from the disaster."
As Americans turn away quite leisurely, keeping tuned to internet shopping and American Idol, the foundations of democracy are being fatally corroded. Something has changed profoundly that weakens us unprecedentedly: our democratic traditions, independent judiciary and free press do their work today in a context in which we are "at war" in a "long war" - a war without end, on a battlefield described as the globe, in a context that gives the president - without US citizens realising it yet - the power over US citizens of freedom or long solitary incarceration, on his say-so alone.
That means a hollowness has been expanding under the foundation of all these still- free-looking institutions - and this foundation can give way under certain kinds of pressure.” Naomi Wolf, Fascist America, in 10 easy steps
“It is a universal truth that the loss of liberty at home is to be charged to the provisions against danger, real or pretended, from abroad.” James Madison, Father of the U.S. Constitution
Is Joe & Suzie America buying precious metal coins and guns? Sales for both are soaring. Are wealthier Americans stashing gold offshore? U.S. gold exports are at a record, yes a lot went to Hong Kong for perhaps entry into China/Asia but a considerable amount also went to Switzerland and London.
Global investments in gold ETFs in 2012 was up by 51 percent yoy.
Ironic isn’t it? There’s a creeping Fascism in the U.S., and the U.S., which stored a lot of the world’s gold during WWII (to keep it safe from an invading fascist Germany), is now seeing huge outflows of gold with Germany even wanting a significant part of its stored gold (stored in the U.S. because of the Cold War) audited, sent home, melted down and tested for purity.
The world's governments and central banks (central bank purchasing was up 29 percent over Q4 2011 marking the eighth consecutive quarter of official sector net purchasing, 2012 saw the highest levels of central bank purchasing since 1964 rising 17 percent over 2011) are not only bringing home their gold but buying gold, a lot of gold. Perhaps they already know what Joe and Suzie are just starting to figure out - the supply of fiat paper money is infinite while the supply of gold is finite.
In troubled times we should all have buying some gold and silver on our radar screens. Are precious metals on yours?
If not, maybe they should be.
Richard (Rick) Mills
Richard is the owner of Aheadoftheherd.com and invests in the junior resource/bio-tech sectors. His articles have been published on over 400 websites, including:
WallStreetJournal, USAToday, NationalPost, Lewrockwell, MontrealGazette, VancouverSun, CBSnews, HuffingtonPost, Londonthenews, Wealthwire, CalgaryHerald, Forbes, Dallasnews, SGTReport, Vantagewire, Indiatimes, ninemsn, ibtimes and the Association of Mining Analysts.
If you're interested in learning more about the junior resource and bio-med sectors, and quality individual company’s within these sectors, please come and visit us at www.aheadoftheherd.com
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