Long time investment guru Porter Stansberry waxes eloquently on the subject of physical gold investment as he wrote last Thursday. It was picked-up by the good folks at Agora Financial and their 5 Minute Forecast staff:
"I enjoy offshore fishing," our friend Porter Stansberry wrote yesterday, drawing a useful Friday afternoon analogy… if, in fact, you’re trying to decide if gold is in a bubble or not.
"I have a relatively modest center console fishing boat," Mr. Stansberry goes on. "I like it because it’s really fast and I can get across to the Bahamas quickly, which is my favorite place to fish. But to get there in a reasonable amount of time, I need calm water.
"My wife is always surprised that I can tell the surface conditions of the ocean just by looking at the sky. I know because the ocean is the mirror of the sky. While you might not be able to ‘see’ the waves in the sky, waves are caused by wind. You just can’t see the wind.
"The same thing is true about the price of gold and the stability of fiat currencies. Gold is the mirror of the world’s paper currency system. The price of gold doesn’t reflect the intrinsic value of the metal — which is almost unchanging over time. It reflects the relative value and volatility of paper currencies.
"The people who are arguing that gold is overvalued are not looking at the right numbers. They ought to be looking at Europe’s banks. They ought to be looking at the amount of short-term obligations that are sitting on the U.S. Treasury’s books.
"The price of gold is reflecting the likelihood that the world’s sovereign nations decide to bail out Europe’s banks and paper over the U.S. Treasury debt."
My thoughts exactly. How much are those bailouts or “papering over” worth in the price of physical gold, in 1.0 oz gold coins? A lot more, in my opinion. Call us today at Lear Capital to discuss this further!