NEW DELHI (Commodity Online) : Indian’s hold largest collection of physical gold in the form of jewelers while US and China are among those holding gold in bars and coins.
Why it became crucial at the moment? Because almost all economists are now saying holding physical gold will be absolutely critical to financial survival of the world.
Throughout history gold has protected investors against various calamities but this time. What is much more important to understand is that physical gold and silver will protect investors against losing virtually 100% of the purchasing power of their money.
Whatever real capital appreciation gold will have in the next few years is of less importance. But what is vital, is that physical gold stored outside the banking system is the ultimate form of wealth protection both against a deflationary collapse and a hyperinflationary destruction of paper money.
Gold has gone up 40 times against the dollar in the last 40 years and almost 6 times in the last 11 years. Very few investors have participated in this rise since the 1999 low at $ 250.
Less than 1% of world financial assets are invested in gold and gold stocks. Between 1920 and 1980 circa 25% of financial assets were invested in gold and gold stocks.
The major rise in gold in the last 11 years has been a stealth move with very few investors participating. The dilemma is that there is not enough gold to satisfy the coming increase in demand.
Analysts said possible hyperinflation in the US, the UK and many European countries are going to help the precious yellow metal at least till 2020.
But it is really irrelevant what level gold and other precious metals will reach in hyperinflationary money.
The result of massive money printing is a collapsing currency, leading to escalating prices and eventually hyperinflation. This is in simple terms how every hyperinflationary period in history has happened.
source:http://www.commodityonline.com/news/Holding-gold-is-vital-for-global-financial-survival-39334-3-1.html
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