Investing In Gold: Is There Still Time?

Remember September 15, 2008? It was a Monday that gave many in the financial and investment community the worst Monday Morning Blues of their life. On this day, the world witnessed the filing of the largest case for bankruptcy, that by Lehman Brothers.
Many had ignored the early warning signs of the housing bubble. Soon the world watched in horror as the toxin of subprime mortgages spread across globally connected financial markets. October 2008 saw another high of the time as global equity markets lost almost $10 trillion.
Memories of the stock market crash of Black Tuesday, October 29, 1929, that signaled the beginning of the Great Depression flooded the public mind as many lost their homes, livelihoods, savings, and, worst, hope.
Governments try and print their way out of economic depressions. Greater availability of money encourages people to spend thereby creating demand for the production of goods and services. Increased production generates employment and wealth and facilitates economic recovery.
After the magnitude of the crisis became apparent around end-2008, many governments ordered printing of tons of money. For various reasons, this strategy has not worked. If anything, it has strengthened the very causes and those very people responsible for the crisis in the first place.
Being the largest economy in the world with as much as 25% share in the global economy, the U.S. took the lead in the printing enterprise. Since December 2012, the Federal Reserve has been printing $85 billion a month to purchase U.S. Treasury bonds and mortgage bonds. This was brought down to $75 billion a month in December 2013.
All this money eventually enters the economy. And because the supply of money increases with the printing of every new dollar note, its value i.e. its purchasing power declines. The same applies to assets denominated in dollars viz. stocks, bonds, real estate, and other collectibles.
If money loses value, so do your savings. What is the point in having a bank account that pays 5%-9% interest rate a year when money loses value at a rate greater than this? This means, you have to shift your wealth into those asset classes that will not only maintain their value but actually appreciate in times of economic turmoil.
Since ancient times, gold has been a hedge against inflation. During depressions, its value does decrease but not as much as that of other assets. In recent times, gold has been moving against the dollar in international markets. The more dollars there are, the lesser is their value and the greater is the value of gold.
Silver is the junior cousin of gold. Because silver is used widely in the industry, its function as an asset is more limited than gold. But when the demand for gold far exceeds its supply, people turn to silver and drive its price upwards.
Through this book, we aim to educate you on the importance of investment in gold in view of the present economic crisis that, in all probability, is set to worsen because its root causes remain unaddressed. We will focus on the fundamentals to help you understand the system completely.
Governments do not really care for public interest because the vested interests are organized and systematic. Moreover, they can manipulate public perceptions to make people believe in the system that actually exploits them. Ever wondered why most American families now need two incomes when only one was enough not too long ago?
Faith in the government and the system is not very bad in normal times. But, as the Chinese say, we live in interesting times. You need to stop relying on fate and take control of your destiny.
This road to financial stability and prosperity goes through investment in gold. Yes, it is difficult and studded with mirages and manipulations. But, getting there is not impossible. And, to the victor go the spoils.