You think risk can be minimized by paper, I do not ... at the end of the day, _if the sh*t hits the fan, your paper shield is going to go up in smoke.
In the last 200 years, how many times have the paper shield gone up in smoke? And is it worth while preparing for that small event to occur. We have seen gold in the past confiscated, and would more then likely see it happen again in your reality of smoke and mirrors. So when was my paper shield ever tested. In 1987 the vast amjority of derivatives came under there heaviest attack ever, by both volume, and price. Let's see what happened:
XAU-1987:
persweb.direct.ca
Well sure looks like the XAU did, lousey during the crash of 1987. So if you held dollars, you would be able to buy low, and hold {for years} This is most likely due to the rate jumps, and the selling of XAU assets for the buying of growth stocks.
Gold-1987
persweb.direct.ca
Well yes, gold had a few good days, but all of them occurred after the crash, and where more related to the deflationary raising of rates. Yeah, I guess if you bought before the crash, held till after, you might make a little. Hardly worth the effort?
US Dollar-1987
persweb.direct.ca
Well it seems that the US Dollar with it's higher rates, sucked in a lot of currency from around the world. Beatiful to see what a crash can do for you?
So it appears that during any turmoil, it's best to be in cash, not gold. But no where did the derivative markets collapse!? But many a person made big buxs, or hedge their losses. Now show me where paper will go up in smoke.... cause if one thing history has taught us is, it repeats. The condiitons for the XAU then and now are the same, with the exception that {Gold is lower, and so is the XAU} but the XAU is an interest related equity. So in higher rates it is vulnerable. But more so the XAU does has massive hedge position to over come in a gold rise. So you want gold? hardly worth while to own.
Last case:
Total meltdown... well, forget gold, buy guns. Cause you aint getting my food without one. Gold would be talked about as a relic of the eon. |
