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The Best Insurance Policy Ever Written.........Bar None (pardon the pun)

Stop getting your rocks off making fun of the gold bugs. Get the hard asset now while it's undervalued my friends. Hold your nose, dive in and simply consider it heavily discounted long term insurance, as you would any required insurance policy. After all, wouldn't you buy the best long standing health insurance policy ever written, if it were offered at the same low price it was over 5 years ago?
If that doesn't convince you "sophisticated" cock-sure modern investors to hold a nominal percentage of your financial assets in precious metals, strictly for wealth preservation purposes, perhaps the simple facts below will resoundly resonate with you sharp shooters.
What is it that you don't understand about the New Monetized Millennium?
- The best performing asset class of this millennium is gold, by a country mile.........
- 2000-2016 Gold up 500% vs. 2000-2016 S&P up 50%
- Near zero% interest rates / ZIRP / QE / NIRP, as far as the eye can see.....
You can be the first to call me when any of that fundamentally changes, in the mean time, bug off!
The vast majority of investors today generally invests in the standard asset classes, namely stocks & bonds, which the established financial industry presents to them as the most desirable and constructive financial instrument to hold, so as to increase savings. Stock brokers, registered investment advisers, asset managers and the like, actively offer these issued contractual obligations to the typical, garden variety, middle class investor who inherently trust their advisers to manage their financial wealth in a responsible manner. Counting on them to fashion balanced portfolios with assets which will both protect and increase their investment holdings over time. On this basis, it's fair to say that the entrenched financial industry distribution channels rely almost exclusively on stocks and bonds, derivatives there of, such as ETFs, as well as mutual funds representing a selective combination of these standard asset classes.
Furthermore, these very same financial advisers repeatedly and ardently recommend a balanced approach to investing, incessantly touting the crucial importance of diversified holdings in one's portfolio. There in lies the rub. How can anything be considered truly diversified if it is made up of the very same general investment classes. Wouldn't the term diversification suggest a collection of uncorrelated asset classes?
A legitimately balanced portfolio, in the true sense of the word, should not only hold a variety of staple equity and credit financial instruments, but also, to actually be diversified, should certainly include other entirely uncorrelated asset classes. The bottom line, how can these qualified asset management advisers relentlessly advocate for balanced diversification, and yet not remotely offer it?
Stocks and bonds are contractual financial obligations drafted and executed on paper by either a private entity or a public entity, both of which carry with them inherent counterparty risk. That is to say, they are entirely backed by the good faith and credit of the institutions which issue them. There is nothing wrong at all with holding these types of investment classes, they have certainly proven their merit over time. Clearly, they evidently hold appreciable value as investments vehicles.
However, that does not change the fact that these paper contracts are entirely based on the performance of an entity outside of your control. In other words, you personally hold nothing that is directly tangible, you don't own the asset outright, you own a written obligation based on the performance of others. Again, let me repeat, paper obligations such as stocks and bonds are clearly of substantive value. In fact, they are especially advantageous to hold over periods of economic growth and financial stability, which our nation has roundly enjoyed for the majority of its existence. However, it would be fallacious of us not to point out that this was not always the case for this prosperous country.
Having stated all the above, I ask you to read the poignant summary of our Nation's current economic and financial well being, from the point of view of Michael Lewitt, a very well respected authority in macroeconomics, particularly as they relate to finance.
Commodity prices are plunging, the dollar is powering higher, the yield curve is flattening, ObamaCare is collapsing, global trade is plummeting and terrorism is spreading across the globe. The high yield credit markets are sending distress signals and 10-year swap spreads are negative. Energy companies are going out of business faster than you can say “frack” and trillions of dollars of European bonds are again trading at negative interest rates. The world is drowning in more than $200 trillion of debt that can never be repaid while European and Japanese central bankers promise to print more money and the Federal Reserve is being dragged kicking-and-screaming into raising interest rates by a paltry 25 basis points. Accurate pricing signals in the markets are distorted by overregulation, monetary policy overreach and group think. Hedge funds are hemorrhaging and investors, desperate to generate any kind of nominal return on their capital, continue to ignore the concept of risk-adjusted returns. Some market strategists believe this is a positive environment for risk assets; I am not among them.
As John Mauldin, another esteemed economic commentator further observes, regarding Michael's work:
Michael pays particular attention to the credit markets, and he doesn’t like what he sees. He points out that corporate debt is now much higher than it was on the eve of the financial crisis in 2007, driven by Fed-fueled leverage. This leverage problem is really hurting the energy industry but goes far beyond it, as Michael explains:
Companies in the United States have taken advantage of low interest rates to issue record levels of debt over the past few years to fund buybacks and M&A. This has driven the total amount of debt on balance sheets to more than double pre-crisis levels. However, cash flows have not kept pace, resulting in leverage metrics that are the highest in 10 years.
Reading through the above remarks, at the very least, one must consider that we may not be in the most secure of economic times, and perhaps even entertain the possibility that we are indeed heading towards more difficult times.
Having introduced the premise that the current economic and monetary order of things may indeed be perilous, or at the very least its soundness be questioned, let us revisit the well understood concept of a balanced diversified investment portfolio discussed above. To get right to the point on that score, in light of the alarming economic assessment and observations above, why would one not seriously consider genuinely diversifying an investment portfolios into alternative asset classes which are not contingent upon economic vitality, and actually inherently unrelated to it. Particularly, those distinctive assets that are decidedly not associated with economic performance both national and global, but even more importantly, not directly beholden to any entity operating within those economies.
Hard asset classes, which are not dependent upon the welfare or performance of either private or public concerns, be they institutional or individual, are self evidently an essential uncorrelated investment class to hold as a counter weight to stocks and bonds, particularly in uncertain economic times. Quite simply, hard assets must be considered as crucial diversifying holdings providing wealth protection. Stated more succinctly, they are financial insurance. Nothing could be more diversified and balanced than owning financial insurance against the fragility of standard financial assets in uncertain economic times.
Astoundingly, the great majority of the very financial advisers that tout the imperative of portfolio diversification are out to lunch when it comes to the simple logic of this long standing tried and true concept of wealth preservation. For whatever the reason, the hard asset classes, essential to balance good economic times from bad ones, are completely off their radar. Hard to comprehend when not even the very best experts in the field of economic analysis can themselves predict what the economic future holds, especially long term.
Protection against the unknown is precisely why most of us hold health insurance, property insurance, fire insurance, flood insurance, automobile insurance, theft insurance....etc. We accept these cost, as they ensure asset preservation should any hardships come upon us. Yet, astonishingly the great majority of investors do not apply the very same responsible principle when it come to their financial holdings, which in many cases are the largest wealth assets they own.
At the end of the day, we are all responsible for protecting our financial assets from economic hardship. Moreover, we clearly should not put our trust in asset managers within the established financial industry who seem to go out of their way to avoid advising us on the importance of considering the countervailing impertaive of the hard asset classes..
This brings us to the longest standing hard asset class of them all, as well as the most uncorrelated of the asset classes, Gold. Through out recorded monetary history, going back over 3,000 years of human civilization, Gold has always served as the quintessential measure of veritable wealth, a store of value which is NOT beholden to the performance of any counter party, be it public or private. This is why nearly all of the richest individuals in the world hold a percentage of their financial assets in precious metals for wealth protection, including the central banks of the wealthiest and most advanced nations on the globe.
Gold is a crucial asset to hold, especially when the monetary authorities are so clearly out of their gourds..........
Get Gold or Get Gang Debased...............................same as it ever was.
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Nice article, but ZH gold articles are preaching to the choir. You get it or you don't, but it ain't going to change peoples minds at this website.
Since we are all experts here, I'll throw in my highly sought after prediction.
History repeats and is cyclical. These cycles are longer than a persons life span, and complicated with our inherently short attention span, our synapse are but a fleeting moment.
Cash will be banned/confiscated same as EO6102 under the guise of patriotism and national security. Central banks can't indefinitely add zeros and print "papeirmarks" (or any fiat currency) before the printing presses can't physically keep up. Yesterday's paper currency is tomorrows trash. Germany could have extended 1923's dilution longer if she had access to digital and electrical transactions 100 years ago. How easy it would have been to revalue all currency with one keystroke.
We already have a cash discount built in. The cash discount is available for what central planners deem "illegal" transactions. Whether those transactions be hookers and blow or merely under reporting to IRS. As soon as Cash is deemed illegal, the divide between paper cash and digital currency will widen. Paper cash demand will outrun supply... for ~5 years until the paper is literally worn out. Perhaps sped up by counterfeiters.
This is when gold, silver and bitcoin shine. Two parties want to perform a transaction outside central planners control. Perhaps for "illegal" services or to avoid loss of value skimming by central bank inflation or to avoid tax.
PM's and BTC will both be used. You will hold allocated PM in a secure off shore account. The bank provides BTC/Au conversion. Convert 1oz of my Au into 3BTC, place in wallet then spend. OR receive USD paycheck, direct deposit to PM account.
Seems pretty fucking obvious. The PM vs BTC arguement is between all those SPECULATORS in PM and BTC. If you want to speculate, then buy and sell both. Or better, put cash in your mattress and food in your pantry. Anything else is like arguing for black/red/green at the roulette table... without complimentary drinks.
Excellent remarks brother.
As for preaching to the Choir on ZH, it seems some bad alter boy members have abandoned the splendid Church Choir.
Clearly, they need to hear the same tune drilled into their little heads;-)
I think this is an excellent essay Bruno. Would you mind if I referred to it on my Blog and lectures. I agree with your analysis and it correlates very closely to what I try to teach to the odd soul who troubles themselves to listen to me. (I preach physical gold ownership for the masses) regards Ram
I would be honored kind sir.....
for a site that claims it has a very discerning readership, there are some howlers of dumbass's on the comment section... it appears to me that many people believe that wealth matters are like a fanatical religion. i.e you pick one investment class asset and stick to it vehemently and any opposition/challenge to your position is sacrilege. Seriously guys are you really that narrow minded?
Gold, fiat, property, gold, bitcoin... they are tools for wealth protection, wealth creation, wealth concealment etc etc.. use all and any as necessary...
www.teamramgold.com/about-us
Ahmen!
Gold will go DOWN to between $700USD and $800USD, ie close to actual cost of production. The global financial crisis is LOOOOOOOONG over - even the incompetent imbecile PhDs in the FED have finally discovered this reality.
Now is the era of stumbling economy, stagnation, and successive bursting of the bubbles created by the central bankers' experiment in monetary madness - which still will not drive demand and price for gold - but WILL drive demand and price for treasuries- ESPECIALLY when the stock market sells off - the equity investors, especially the institutional ones, are NEVER going buy inert gold instead of income-producing assets.
Sometimes it pays to cast a longer view on things. People can tell me from morning to evening every day for years on end that 2+2 is 7. That does not make it right, and the repetition will never make me believe that. They can also tell me that paper gold is the same as physical gold, that will never be right either. It does not matter how many times the fallacy is repeated, it does never get right!
I know they can print dollars at no cost, I also know that they can create paper gold ad infinitum. I also happen to know that physical gold costs more and more to produce every year, and that gold is in limited supply!
So why would I care that paper gold drives the price to 700$? It will just make my purchases easier for a short while.
You see, the repetition makes no difference to me. Supply and demand is one of the fundamental laws of economy. I know supply is limited to about 2% per year, come hell and high water, and I know more than half the world are not under the thumb of the FED.
I will continue to acquire physical gold, and you can drive the paper price whereever you want it. It is not gold. Never has been and never will be. 2+2 is still 4, that does not change.
You may well be proven correct in your well measured assessment. However, you can not know for certain what the future will hold, especially in the current "experimental" (to use your words) application of extreme unproven monetary policies.
Just as you never know when the flames of a raging wildfire will engulf your home.
Best be safe than sorry.......
Gold still carries a price premium due to the depth of the 2009 global financial + economic crisis, and all the hype and speculation. If gold does go down to the price of production as I predict, then I would buy some gold (only about $100K),
BUT NOT because I believe any of the irrational dogma, hype, and fantasy about the inevitable/immanent crashing of the USD, worthlessness of Treasuries, etc
BUT ONLY because I would be buying gold at a reasonable, low-enough price that I could reasonably expect to earn a good profit on it in the near-term due to anxieties and panics resulting from the turbulent monetary, financial, economic, political, etc conditions.
I learned the VERY expensive way to NOT let emotions interfere in my investment decisions, a lesson that is imprinted in my genetic structure. I will invest in anything legal that my objective rational analysis indicates that I can earn a reasonable profit from in a reasonable time-frame.
While traveling in Mexico my friend tried bribing the local police with a bitcoin from his phone. They punched him in the balls and took his phone and the gold in his pocket.
Ok I made the story up but to make a point.
All I know is, the last time I looked, gold was still going down, and I have to sell some more of my now-tiny stack, this day, whatever the going price may be, to pay my Dad's nursing home bill. And to pay my rent, and to pay my utility bills. Now. Not many years from now.
Someone tell me again how buying a whole bunch of silver (now totally gone) and gold (now three-fifths gone) in 2010-2011 (and all the way down since) "preserved" my wealth.
What a bunch of lies. Tell us why YOU are responsible for your father's nursing home bill?
What's the matter with you? I paid for my Dad's nursing home bills too. I/we didn't want to put him a hell hole that would be paid for by the tiny government payments he would have qualified for. So I paid him back a little bit for all the years he put up with his dumb ass kid and raised a son who turned out to do well in life. I owed him that much......and more. So I put him in a nice place where he was treated well and had a good last few years. He was my Dad for God's sake! Maybe this guy has a similar situation and he's stretching to do the right thing.
@ Jungle Jim,
Good for you, sincerely. You have however mentioned the unmentionable, as far as ZH is concerned: that gold and silver are far from perfect. Like you I've lost well over 50% on a similar timescale. I found ZH about that time and I read and read and watched and watched and got my fingers and then my torso burnt.
I'm still holding on but am sorely tempted to cash out now. Just watch my downvotes, lol.
Insurance preserves nothing until you need it. Are there cheaper policies that may be offered at a later date, which you could purchase for a better price in retrospect, sure. However, at the end of the day, it's being covered that matters most in the end.
Gold is a long term hold against monetary disorder. You can't precisely time when it will become imperative to own. All that's is required is 10% of your total finacial holdings. It's great if your typical financial assets gain value, but the day they take a sudden hit, it's wise to hold a distinctively uncorrelated asset class.
That's it, nothing less nothing more..................Wealth protection for rainy day.
You should be content that you don't have to cash it in, but when you do, you will be utterly relieved that you owned enough to stay out of finacial trouble.
If 4 years ago you would have taken just 1% of your PM allocation to BTC , the gains from that 1% allocation would have covered the losses on the 99% PM allocation. Had you allocated 2% you would have more than doubled your money even taking into consideration the PM losses. You guys are just absolute genius's - hey , what about this - ever heard of diversification ? No ? How about hedging ? Naa , it's obviously easier for you to be an ignorant hater.
Any idea on how hard it is to convince your wife for permission to shift some of your household wealth into Bitcoin? The word NO comes up a lot.
How about if you did that two years ago instead?
Oh...
Oops.
PS - Calling people "ignorant haters" is, in reality, **not** the best way to convince them that your point of view regarding a financial instrument is correct. Just thought you'd want to know...
Jim, I know the feeling. I loaded up on silver way too early and have seen it go straight dead to hell. The mistake I made was believeing all the doomsayers and ignoring the facts. Is it time now to buy? Probably. But the big jump I was expecting is still a long way off. There are virtually no limits to the amount of avarice, greed and pure evil in the bastards who have pounded precious metals for years. I think I'll live long enough to see the reward but damn! I bought way too early ($28 to $24). Oh well.
I offer my sincere sympathy for your losses. You have learned a very expensive lesson, ie be extremely careful of the advice and predictions offered by pundits who are also peddling stuff, eg stocks, GOLD, apocalypse newsletters, books, etc.
If you had purchased treasuries in 2011 instead of inert shiny lead, you would have been collecting as much as 4.7% interest AND you would have HUGE capital gains instead of loss.
So the strategy of buy high and sell low is the fault of the commodity and not the purchaser?
Nigger, please.
Dude bought at the peak thinking he was going to get rich and put all his eggs in one basket.
Real smart.
Cry me another river.
Long enough timeline, dude. Just get a 10 year deferment for all your bills like the rest of us stackers.
Jungle you are correct about losing money on the asset. The problem is timing to be honest and the years you stated. I bought back when the shiny stuff was $250.00 and still hold it today. I have not lost anything.
I prefer tangible assets. We all have our preferences. The one thing I can do with PM's is hand them to my children without government taxes. Long term my investment paid off for now. I am nto a big gold bug like some here. I also own a farm with it own clean water.
I believe its called a capital loss.. also, you shoulda BTFD
So in other words - this so called "wealth preserver" has in actual reality produced a consistent capital loss for the last 5 years ?
Are you guys fucking schizophrenic or what ?
"five years"... LOL! How long do you expect to live? 10, 20, 30, maybe even 40 years?
Do you plan on leaving any wealth to your offspring?
Speaking of schizophrenic...
Nigga please.
Hammering the price of Gold as a way to shore up the percieved value of fiat has been going on for DECADES.
When the Euro first launched and was almost DOA due to Italian debt and a host of other issues, European countries dumped Gold on the market in huge quanitites. This was the reason for 'Brown's Bottom'. Just because you failed to notice this pattern, doesn't mean it doesn't exist, it just means you don't know what the fuck you are talking about.
And the only reason your beloved bitcoin (which is relies on private servers that use Gold in thier circuitry, I believe) has any strength is because the Chinese are pouring cash into it in the short term. As soon as that dynamic changes, it will drop like a stone. I guess you could always 'invest' in Amazon vouchers instead, at least they won't lose 52% value against the USD in a single year like Bitcoin did in 2014.
servers LOL
Yes. Servers. All of the privately owned servers your traffic is routed th...... you, know what - forget it, arguing with the willfully ignorant is ignorance itself.
Please, continue to invest money into your ridiculous scam and believe that internet access is a basic human right.
Good luck! :D
Awesome post.
-Argenta
Dear Giraffe,
Bitcoin doesn't use servers. Its architecture is peer-to-peer. Also, is not sensitive to how traffic is routed because - as opposed to credit card payments - bitcoin transactions are completely public and tamper proof, thus can be transmitted in open text.
Sincirely,
G
"Bitcoin doesn't use servers." --
So when the power grid and internet is down I can still access that purchasing power?
Phew, well that's a relief...
This reminds of the time that I was trying to describe and explain how Bitcoin works to my parents.....LOL...it took a few weeks but they now get the gist of it.
Don't waste your keyboard , most of these numbnuts still think the earth is flat.
Well, from space I can see that the earth is round. Answer the fucking question below asshat. Galileo could answer such questions about the "round earth", why can't you ponzi artists do the same thing? I mean, if it isn't just another fucking ponzi.
The government can and will control internet traffic when it suits it's own interests and the bankers/financiers are in fact the fucking government now.
I like the concept of digital currencies, if there actually was some rational RULE OF LAW today.
There isn't you stupid fuck and I have been well aware of digital currencies and the block chain "ledger" since 1990. They were talking about this shit are fucking Netscape for Christ's sake. The banks are very much invested in this "new technology".
To me digital currencies are, at best, another hedging mechanism. That sure as hell implies a lot of risk, period.
Dear commander something or other,
Please explain to me how you can get the internet to work without your traffic passing through a single private hardware server or point of presence. As an ex - network guy I'd be grateful to learn something I've obviously overlooked for my entire career.
Yes, I would like to know this as well. Especially considering the people I know who went to work for JPM on digital currencies back in the late 90's...
That is an intelligent question, let's see if you can actually get an intelligent answer...
Do you sell your insurance policy if the premium goes up? It's long term insurance against the unforseen, hold, hold hold in this regard.
Are you a politician or what ?
Answer the fucking question.
Good morning sunshine
Not my gig
You have no answer to the man's question ?
Hilarious.
Don't put all your eggs in one basket and don't blame others for your bad decisions.
Don't put all your eggs in one basket and don't blame others for your bad decisions.
What ? No mention of the actual best performing asset ?
2009-2015 Bitcoin up 500000%
I would take that much appreciation as a warning BC may be topping out. It's one of those too-good-to-be-true kind of things.
Conversely, the low prices and unpopularity of PM indicate low down side risk.
This might be a good time to jump from one to the other. At least that's what I would do.
It still remains to be seen if ButtCoin is actually a real asset class.
To put this in rational perspective, I offer you the following:
Gold as a veritable asset class has been well established over 3,000 years of human monetary history. Bit Coin has been around all of 5 years, if that.
Math has been around since the dawn of the universe.
Remember your words of ignorance.
You haters will be laughed at harder and harder over the next decades and centuries.
I have a digiAsset to sell you - it's called Skatecoin.
Here's how it works - every time I do a trick, you get an olliePoint, and the number of olliePoints it takes to make a Skatecoin increases. The more olliePoints you have, the richer you are. Since the number of tricks I do only ever increases monotonically, you only get richer by holding Skatecoin. It's a win-win situation - trust me - I'm an expert at Skatecoin.
Be the lead sucka and beat the rest of the suckas. Buy yours today, for the low price of $1M/Skatecoin! It's a one-time investment and totally doesn't have anything to do with other fiat currencies, although it takes fiat currencies to buy into Skatecoin. Do it man - for the children.
www.tradeyourhardearnedlabor4skatecoin.com
I tell you what , here's the deal - you crawl back down into your damp basement , you can eat another 2 cans of your favourite stale 30 years old prepper food whilst fondling some eagles in the candlelight. You can even watch them drop another 50% - 70% over the next 5 years whilst your down there in the cold and dampness waiting for armageddon and the EMP's. In the meantime , let us fools enjoy the sunshine , good food , honey's , and look forward to another 50000% gain. Cos unlike you , we is just sucka's innit ...