As the global economic crisis is intensifying, we are seeing currency wars and even some trade wars have commenced. The euro is on the brink of collapse and the US dollar’s future isn’t that promising either…
At the same time, more and more of us are turning to sound assets, more reliable investments: we buy land, precious metals, we invest in real estate etc. But from all these, gold and silver are probably the best assets to invest in.
It’s not just the experienced investors, billionaires and “maniac” precious metal stackers that are buying. The governments have engaged in massive gold buying and repatriation activities.
The obvious result will be: precious metal prices will go much higher on the medium term.
China and India have been buying gold, but in a recent article about Russia – we find out that the biggest country in the World might as well be the biggest buyer of gold (Russia having bought roughly 25 % more gold than China during the past decade).
Smaller nations include South Korea, Azerbaijan, Belarus, Turkey – they’re also strongly bullish on gold. In fact, the Azeris only recently (in 2012) started creating their own deposit of gold. The first ton was deposited at a vault in Baku.
In 2012, Germany announced that it will largely repatriate the Bundesbank’s gold holdings from vaults in Paris and New York.
Similarly, Venezuela has already returned their gold holdings from foreign banks, while Switzerland and the Netherlands are copying the German repatriation model: they are requesting their gold back from the Federal Reserve’s New York vault (where much of Germany’s gold was held for decades).
And if all of this is not enough, then check this out: Brazil has doubled its gold holdings in a matter of months.
We can observe that all BRIC nations have become major gold buyers: China, India and Russia certainly are in the top 3 globally and Brazil is powerfully accelerating from behind.
Apart from the population buying gold, governments are hoarding the yellow shiny metal in immense quantities. This is a sign – something very bad is about to happen, which is most likely a currency crisis. They are probably expecting it and know something concrete that the greater public is unaware of.
Let’s not forget that the euro crisis is worsening and the euro will most likely be the first currency to either crash and disappear or, some of the eurozone’s “most threatening members” will get kicked out (e.g. Greece, Italy, Spain, Portugal) and the currency’s zone will be restricted to just a few “better performing countries” (like Germany, Scandinavian countries etc.).
If governments are in a “gold rush”, shouldn’t we verify our own precious metal holdings?
The importance of gold is increasing and the massive purchases by governments will certainly increase its price on the long term. It’s better to buy earlier than later.