Where Else Am I Going to Put It?
I have a series of questions I always ask prospective clients as part of my commitment to offer the very best advice, even if it does not result in a sale.
One of those questions is “What has caused you to consider purchasing metals now?” Increasingly, I hear something along the lines of, “Where else am I going to put my money?”
These individuals have come to a realization that cash is going backwards. The Bureau of Labor Statistics (BLS) reports the 12-month rolling CPI as 1.7%. These numbers have always been massaged, and the savvy public knows it. John Williams’ highly respected “Shadow Stats” reports real inflation near 9%.
(A side note: If the BLS had reported literal inflation figures since 1990, Social Security payments would be double what they are today. Deficit implications?)
Consider the alternatives:
– 1 month, 5 year and 10 year Treasuries currently yield .11%, .76% and 1.73% respectively.
– The stock & bond markets “feel” toppy to many. They have money in the markets as part of a balanced portfolio, but many are questioning the overall stability of the markets.
– Real estate. Is the correction over? Probably not, as there is a glut of foreclosures and short-sales in the courts and current bank holdings – with more to come.
– Their small business (if they have one). Most small business owners are just trying to hold on, let alone expand.
So, if you take the 10-yearTreasury of 1.7% and subtract the 1.7% CPI, you have zero real rates. Subtract real inflation of almost 9% from the 10-year Treasury of 1.7% and you have a significant negative return on your cash.
Hence the phone calls about acquiring a metals position increase. Because, where else are you going to put it? This is one reason why gold (and silver) have always ‘preserved wealth’. And they have done so for more than 2,000 years.
All Things Considered – John’s Commentary:
Please forward this article to your friends who have been sitting on the fence. They are welcome to call and ask questions. As you already know, they can do so without obligation or the risk of a “sales pitch”.
Quote of the day: “For more than two thousand years gold’s natural qualities made it man’s universal medium of exchange. In contrast to political money, gold is honest money that survived the ages and will live on long after the political fiats of today have gone the way of all paper.” – Hans F. Sennholz
