Hold GOLD for your own wealth protection and insurance against both monetary and political shocks.

Hold GOLD for your own wealth protection and 

insurance against both monetary and political shocks.

Eurozone saga continues

A record number of European banks, 800 to be precise, borrowed money as part of the ECB’s LTRO yesterday, compared with the 523 banks who borrowed in the last LTRO back in December. 

This does not sound like a situation which is improving in any sense of the word. Banks, central banks and governments in the West have worked extremely hard to debauch their currencies; this new step has merely spurred on the race to end the fiat money system.

If banks are still rushing to borrow money, then maybe one should be worried about the money which you’ve deposited with them.

The MF Global collapse should be evidence enough that risk remains high in the financial markets, making gold and silver ownership, an investment position free from contract void of counterparty risk, a more attractive prospect.

Meanwhile efforts to save the Eurozone’s countries, let alone banks, are proving fruitless. Figures from Greece today showed the economy is in its worst position since the crisis struck. Reuters reported, ‘Greek manufacturing shrank at its fastest rate in at least thirteen years in February as production and new orders declined at record rates, driving the sector deeper into recession and forcing firms to shed more jobs, a survey showed on Thursday.’

Gold as a medium of exchange

As we reported recently, Iran is now accepting gold payments. This was further confirmed on Tuesday when Mahmoud Bahmani, governor of Iran’s central bank, said the country was ready to accept gold as payment for oil. 

In fear of repeating ourselves this move is most likely not just down to recent EU and US sanctions. It is also likely to be down to the fact that the US Dollar, the international reserve currency, is continually being debased and slowly other countries are losing faith in it.

Along with Iran, Russia and China’s central banks embracing gold, we continue to see record amounts of gold buying from other central banks. Earlier this month we briefly discussed the World Gold Council’s latest report which showed Central Banks’ gold buying activity was up 571%, making them net buyers of gold.

Ignore the price

Yes it is bad that the gold market may be manipulated, and investors should celebrate the  work of GATA. However for investors still considering whether or not to buy precious metals they should bear in mind the reasons to own gold are still there, in fact this behaviour shows that they are stronger than ever.

In one sense yes, the power and desire of central banks and governments to manipulate the gold price is almost frightening. It is also tempting to think Bernanke was right, things are improving. But as Mises once said ‘Governments cannot free themselves from the pressure of public opinion. They cannot rebel against the preponderance of generally accepted ideologies, however fallacious.’

Whilst it is always nice to see the price of gold go up, short and medium-term price movements are fairly irrelevant. 

You should try to ignore them and remember that you hold gold for your own wealth protection and insurance against both monetary and political shocks.