Being that gold is an international currency and is traded 24 hours a day in some gold market or another around the world, I often come across interesting gold market related articles during my daily skim of the news. When you look at the bigger global picture it’s not uncommon to read in a day about gold mining in Africa, rare gold and silver coins being found in Scotland, a horde of gold relics and silver bars being pulled out of the shipwreck in Florida. And, of course, there is daily gold market news flowing out of the Indian gold market, the Chinese gold market, and the United Kingdom gold market.
News coming out of the United Kingdom is where I found this article in the Financial Times which was written by Merryn Somerset Webb in the beginning of 2015. I like to hold onto articles relating to the gold market that I find interesting for a while, and then go back to them a few months later to see how he prognostications regarding the precious metal or its gold market have played out. Sometimes I find an author who understands the value of holding physical gold and silver who also understands the ins and outs of owning gold not only as a hedge against currency fluctuations, but as a hedge against the ever growing threat of banking system failures.
Does The Gold Market Really Return Negative Interest Rates?
This article titled “Negative Yields Are Everywhere” seems to me to be written by an author who is becoming more and more comfortable with the idea of owning physical gold, but still has a little ways to go as far as fully embracing the true values of gold ownership, and fully understanding the gold market.
An ITM Trading Professional Discusses How To Enter The Physical Gold Coin Market.
Before we go too much further into a breakdown of Webb’s article, I want you to be able to see the article through my eyes, and see what I see, so I will tell you this. A substantial part of my time every day working as a senior analyst for ITM Trading was spent talking to current or prospective clients, or in some glorious cases their financial advisors, and dispelling the myths that surround investing in gold, and the gold market, whether it be gold bars, gold coins, or even rare United States gold coins.
The truth is, as simple as gold should be, our society and banking institutions have made the gold market seem much more complicated than it truly is. For instance financial advisors always try to compare gold in its several forms to banking and investment “products” that were conceived and derived in company boardrooms with a definite directive that these products be profitable for the institution selling them, while limiting the liability of that institution.
If things do go wrong with one of these products, there are pages and pages and pages about who will have what obligations and who will go where for what type of mediation and so on and so on.
Gold Markets And Physical Gold Markets Are Not The Same.
When you purchase and hold physical gold bars and coins (and she should have some junk silver as well), you are relying on no banking entity, insurance company, government, or any other third party for that matter to make you financially whole. The entire idea of holding physical gold, at least in part as ITM Trading sees it, is to remove a portion of your wealth from the currency and banking systems so that if and when there are crashes or large “market corrections” not everything you own will be out of reach and in jeopardy of rapid evaluation.
There used to be an old bankers saying, “Put 10% of what you have in gold, and hope you never need it.” I used to tell my clients, and somewhat of an updated version of this old bankers saying, “If all of the computers at your bank and its headquarters crashed tomorrow, you wouldn’t have any idea about how or when you would have access to your wealth. If all of the computers and ITM Trading crashed tomorrow, your gold and silver coins are still in your safe.”
If you take a moment and think about what the old banker and I have to say, you will come to the conclusion that owning gold bars and silver coins is not at all like buying stocks or bonds, or depositing Federal Reserve notes in a bank. Physical gold and silver and unsecured investments are two completely different animals, and you really can’t compare them.
The title of Webb’s article, “Negative Yields Are Everywhere” caught my eye and her article caught my attention. Webb begins her article by saying that he couldn’t imagine “not holding some gold in today’s increasingly odd financial environment”.
She goes on to define a negative yield as entering into a financial agreement whether it be through a bond or other instrument in which the buyer or investor receives back less than he invested in the first place.Webb brings up as an example a chart from J.P. Morgan showing the value of the European government bonds outstanding that have a negative yield. He cites that in June 2014 that number was negligible but at the writing of his article, just half a year later, the value of those bonds is now over 1 1/2 trillion pounds!
The author then brings up something that I find quite telling. Mario Draghi, who is a World Bankster, is buying negative yield bonds by the truckload because he sees opportunity with these bonds if interest rates drop even lower than they are. Being that Draghi would be someone in the know as far as where world banking interest rates are headed.
People have owned gold and silver, and used gold and silver coins for successful trade for thousands of years. A pile of gold from a time long ago still holds substantial value today. I wonder what a pile of negative yield European government bonds will be worth 1000 years from now? How much will paper gold (ETF’s) be worth on the gold market 1000 years from now?
The truth is when you own gold coins and bars you can’t compare them to the any other “assets” you may have in your portfolio. Physical gold is wealth insurance plain and simple, and as Webb put it, in “today’s increasingly odd financial environment” I can’t imagine not holding some gold either.
If you would like to discuss putting a portion of your wealth into physical gold and silver coins and bars, or perhaps rare United States gold coins, please contact ITM Trading at 1.888.OWN.GOLD or at ITMTrading.com.