Hi there,
I wrote this article way back in 2013 as a way to get things off my chest and also to help me process what is going on in the world. Having now found Steemit I thought I’d update it a bit and upload it.
5 Reasons why all Australian’s should invest in Gold and Silver: 2013!
- The falling Australia Dollar
- Falling interest rates
- The Bank Deposit Tax AKA Stealing your wealth to “bail in” banks
- The outlook for the global economy
- Two words, China and India
1.The falling Australian Dollar:
The Australian Dollar was first floated in free trade in December 1983. Since then the average value of the AUD has been 75 cents to every 1 US Dollar. In 2001 we saw a low of 50 cents and in 2011 we saw a high of over $1.10.
There are many reasons for the extreme fluctuations over the last 30 years but that’s for another day. In 2008 when the GFC hit, interest rates around the globe went crumbling down (in some cases to 0.25 or zero) to try and stimulate the economy. However, in Australia the RBA cash rate only dropped to an emergency level of 3%. (now in June 2017 they are 1.5%!)
Why is the 3% cash rate important in the scheme of things? Because this saw our big 4 banks receive a huge influx of deposits from all around the world witch saw a huge increase in demand for the AUD and consequently sent the aussie dollar to the moon!
This process is now well along the way of reversing which means a lower aussie dollar. Because gold and silver prices are pegged to the US dollar this means as the aussie falls consequently the prices of gold and silver are rising.
I like to look at it as insurance for the falling aussie dollar.
2.Falling interest rates:
The biggest lie about interest rates by politicians in Australia is “low interest rates are an achievement of this government and they are healthy”. This could not be further from the truth. Since 1970 the Australian average interest rate is 8.6% with a high around 1974 of 21.75% and currently we are at our all-time low of a 2.5% cash rate. (June 2017 1.5%)
Interest rates have been falling in Australia due to global economic turmoil and if we had interest rates around 8.6% per cent today, well let’s just say it would NOT be a nice country to live in.
Each MONTH! there are over 1000 (yes, one thousand) mortgage foreclosures in Australia! Imagine what that figure would be if interest rates were at the average of 8.6%!!!
The point of the story is this, lower interest rates means more deposits (mainly large international deposit) will look for a new home. This will assist in bringing the aussie dollar lower as demand will weaken for the AUD. With the international stock market at all-time highs and the real economy at an all-time low the smart money will be storing their wealth in hard assets that have intrinsic value ie. Gold and silver.
(June 2017, I would add Bitcoin to this now also, but we will drive into crypto currency in another article)
The other piece of mainstream garbage you will hear is that interest rates have bottomed and now is a great time to lock in a fixed rate. Here in Australia we have never been in more debt as a nation. This includes government, business and personal debt and there’s only one way to sustain this and that is long term low interest rates.
3.The Bank Deposit Tax (A.K.A. "the Bail in" stealing your wealth to save the banks)
You have probably forgotten about the mention of this policy by now as this was their plan. Sneak it in one night on the ABC news and never speak of it again until the banks all of a sudden have a Bank Holiday Monday and a percentage of your savings disappear.
The proposed Bank Deposit Tax is a 0.5 per cent levy on your savings. The government has come out and said they are raising money to go into a Financial Stability Fund for if and when the big banks need a bail out (bail in, in this case). If you have been sleeping under a rock you may not have realised the situation not that long ago in Cyprus. It was a very similar policy but the banks closed, you could not access your money and when they opened again a portion of it was gone.
This is going to be a very common policy around the world as banks are dry of capital and governments have little resources to help them seeing the banks have got them into debt up to their eye balls along with every other man and his dog.
If you own physical gold and silver bullion outside of the financial system you can protect a portion of your wealth from this outright theft.
-June 2017, the Australian Govt just announced a bank tax as they feel the banks aren’t paying their fair share.
4.The outlook for the global economy:
Let’s go back to basics here. Take away all of the nonsense, forget all the noise about an economic recovery and open your eyes for a minute. Since 2008 things have only got worse. Unemployment is higher, total debt is higher, asset bubbles are bigger, social issues have worsened. I’m not a doomsdayer I’m just realistic. Every empire comes to an end and the Western World is slowly but surely heading down that road.
How the other side will look no one knows. All we do know is that for over 5,000 years gold and silver have always been considered the only real money and they have always realigned (re valued) themselves with the amount of worthless currency in circulation.
The real recovery will never happen until all governments can admit the situation we are in and start working towards a true solution that protects all involved and not just the big financial institutions.
Every true investor should have a portion of gold and silver in their portfolio as a store of wealth, to increase future wealth and to be prepared for a possible fiat currency meltdown.
5.Two words, China and India:
These two economic powerhouses have been buying up physical gold and silver like never see before. In fact they are importing so much physical bullion that the Indian government has now implemented laws to slow down the import rate of bullion by introducing new taxes and even closing the doors for 30 days on gold coming in.
The interesting thing is this has only had a positive effect on the prices of precious metals in these countries with premiums at an all-time high and people willing to outbid each other just to get their hands on it.
One would ask, why are China and India buying so much gold and silver? What are they preparing for?
We can make assumptions on these questions but the fact is however the next chapter plays out if you don’t own gold and silver you will be on the wrong side of the wealth transfer as paper assets will be destroyed and hard assets will win as always throughout history.
If I can help just one person see what real money is and avoid loosing everything in this coming crash it’s one more person that can help rebuild this economy.
There are many other factors as to why every Australian should own gold and silver but I honestly believe silver is the best way to profit during the currency crisis we are facing. Here are five more reasons (of many) to consider Silver to protect yourself and your family.
- Silver is past peak mining and getting more expensive to discover.
- Silver is needed in over 12,000 industrial uses for products we need for human existence.
(there is 1/10 oz of silver in the laptop you are reading this article on!) - Solar power is part of the future and silver is an important part of solar panel production.
(google or youtube India’s solar energy program, its HUGE!) - Silvers demand has only been increasing while spot prices have been volatile.
- Silver is affordable for more of the global population
Thank you for taking the time to read my post and look out for more articles from me.. Currentsee "helping you see what money really is"
Good luck and good investing!