CJ:
We are all products of our past experiences.
My father was a WW2 vet (Canadian army). He volunteered in August, 1939 (one month after I was born) and was overseas for the next five years. Thankfully, he made it back in one piece. As a result of this fact, I have always retained an inordinate interest in the events and causes of that conflict.
In the years preceding WW2, Germany experienced a period of hyperinflation that was so severe that it still influences German thinking and German policy to this day. For those who lived through that period, or indeed for any who have even read about it, their views on the fragility of a paper currency are likely to be very different from those who are not aware of what transpired during that period (usually referenced as the "Weimar Republic" era).
No doubt there are folks who think that such events could never happen here. I don't share their belief. In fact, my interpretation of current Fed activities and policies is that the probability that we may fall into a similar set of circumstances is quite high. Historically, gold has always been the repository of an individual's accumulated purchasing power and for the observant, it is increasingly displaying this characteristic.
Over the last decade, there have been several instances where a paper currency has been ravaged over a remarkably short period of time (Russia, Thailand, etc.). Where this has occurred, involved populations have found themselves much poorer in the wake of such events,..... that is all save those who maintained a decent fraction of their wealth in gold. Hard to conceptualize a better insurance policy against currency risk than the yellow dog and delightfully, one gets to retain the insurance premium as well.
What utterly astounds me is that most Americans remain oblivious to the fact that over the last year or so, the buck has already dropped 30% of its global buying power and to this point in time, there are no hints that this precipitous collapse has reached a bottom. How any American could still retain the view that gold is a "barbarous relic" in view of this fact defies imagination.
At this end, I have been slowly but surely accumulating gold stocks for the last three years. I rarely trade them. I view them as a leveraged currency insurance policy. So far, I haven't observed the public turning away from the paper currency, so I haven't felt the need to move into the ownership of the metal itself, although if the Fed's already manic printing intensifies, at some point, I will.
Best, Earlie |
