While GMRgold recognizes the significance of the rapid changes occurring in the world. The emergence of a parallel economy bypassing the USDollar, inflation wiping out disposable income around the world, a banking crisis due to bond values dropping with every interest rate hike, a housing crisis because people forgot that Mortgage Interest Rates were not always nor was it possible to remain near zero, and of course the overall division and moral decay of society in general. It does indeed cause one to believe like chicken little. However, it is nothing new. Fear is a powerful emotion to tap into. And no one does it better than governments and politicians.
There are studies about the fight or flight emotion that can trigger “freezing”. This is an unconscious defense mechanism that at the moment, offers the best chance of survival. It allows the heart and the brain to slow down so that action can be taken, or in extreme cases, fake death. These same studies show that any action, even if wrong, is better than no action.
Turning on any news network, liberal or conservative, rarely gives anyone hope today. With the obligatory exception of the human-interest man saves dog story to close out the newscast. Dog bites man is not news. Man bites dog, is a headline. Fear is a commodity and a tool used by those who require control. It appears that fear mongering has placed the United States in a “freeze.” The Dow Jones Industrial Average is up 5.3% YTD. Gold YTD is up 5.3%. These two numbers traditionally reflect inverse results. This alone cannot diagnose the mental state of investors, but it certainly opens the conversation.
A flock of geese migrate from their winter and summer homes in a “V” pattern. The leader of the wedge must endure his or her turn at the helm without the luxury of drafting. And when the load becomes too much it is time to find another leader. The flock will literally circle with no direction until the next feathered navigator takes the initiative to continue the trip.
It is difficult to determine which way to go with investment dollars in the current climate. And as doing nothing in a fight or flight freeze is not the recommended action, waiting for a signal in stagnant economic times is not what smart money does. Some segments will break out to the positive and some segments will break out to the negative. Diversification in times like these is more important than in any other. In the last eight recessions since 1970, Gold outperformed the S&P 500 as an alternative. To the tune of 17.9% total. Gold is insurance on your money. Just like the insurance on your house, your car, or your health. When you hear of the thousands of treasures of Gold caches found around the world, one can not help but think “if there are this many being found, how many more must there be.” And in turn, the realization sets in that Precious Metals have long been used as a store of wealth. An instrument to be used in difficult or emergency situations. Let’s face it, those hoards of Gold were not discarded. They were hidden for a reason.
The sky is not going to fall. We all know that. Things are going to evolve and change. We all know that as well. The question to ask is, “Am I properly protected from what I expect, and what I never expected?” There is never a bad time to Buy Gold & Silver. But some times are better than others.