So here we are, roughly 1.5 years after my original post.
Hence, time to check where things were going and compare predictions from Apr 2011 to reality.
Here's the stats in numbers (including Euro) :
Gold 04 Apr 2011 : 1435.50 US$ | 1008.08 Eur
Gold 27 Sep 2012 : 1777.60 US$ | 1376.57 Eur
US$
+23.8%
, Eur
+36.6%
Turns out, the "fever thermometer" of all FIAT currencies (unbacked paper money) tells us the predictions came/remained true.
Remember, it's not the Gold that became more expensive,
it was mainly the paper money devaluating, effectively losing purchasing power due to inflation but mostly excessive 'money printing' by respective central banks.
Medium and Long term trends remain fully intact.
For common-sense check, take a close look how your personal prices for essentials have developed - food, fuel, energy etc. And then check if you see any reason how this decades old trend would reverse - I can see none, rather it continuing at accelerating pace.
Silver 04 Apr 2011 : 38.46 US$ | 27.01 Eur
Silver 27 Sep 2012 : 34.66 US$ | 26.84 Eur
US$
-9.9%
, Eur
-0.6%
Being far more volatile, Silver took quite a ride. Turned out Apr 2011 took it explosively very near its all-time-high, somewhat distorting the point-to-point comparison.
Will be interesting to see where it's at in Apr 2013...
Medium and Long term trends remain fully intact, despite significant volatility (aka manipulation, but that's a different story that - in its intensity - silver shares with no single other stock exchange traded asset worldwide in such extremes).
So compressed into as little as possible text, kept in layman terms, what happened :
Central Banks all over the world have intensified their "race to the bottom" in devaluating their respective currencies.
That central bank magic is called QE aka Quantitative Easing, performed increasingly excessively by :
US Federal Reserve, Bank of Japan, Bank of China, Bank of England, European Central Bank. Other national central banks took similar or other harming steps to peg their currencies onto the race.
All done to create the illusion of economic recovery, all while the real world slowly fades from recession further in direction of depression. All done to prop up too big to fail bank institutes that operate on less than 2% of core capital in the global markets.
In short, give a banker 1000$ to play an he will place bets in excess of 50000$ in the markets. Deutsche Bank (to give a german example) is leveraged something like 1:63. That means for every 1000 Euro they have (or claim to have) on their balance sheet, they game the market with 63000 Euros.
Extremely profitable when they win, extremely dangerous when they lose.
And since the banks lost more often than not, they're hopelessly insolvent, carrying trillions (!) of toxic derivates in their balance sheets (still valued 1:1 aka 'mark-to-model' rather than realistically mark-to-market in order to make the impression of solvency).
And since they were bailed out by our beloved politicians countless times, their problem (corporate debt) now has become our taxpayer's problem (sovereign debt). Great lobbying I must say.
So how's the future looking for us all ?
Grim.. very grim. The race to the bottom is accelerating at an insane pace, as no nation wants to be left behind in order to maintain FX ratios suitable for exporting goods at competitive prices.
While good for the banks and industry, we (taxpayers) are left holding the bag. Business as usual.
During my ~2 years of research focussed on global finance systems, one thing became clear :
It's not the politicians that run the show, they're merely puppets to create the illusion of democracy and choice.
That thing is a dark, dark rabbit hole - and it goes DEEP. VERY deep. The level of corruption on political, economic and financial scales is beyond words, it is literally rampaging insane.
While originally my investment had the goal of proving some insurance against inflation and banking woes - it has now literally become a personal hedge against the criminality, incompetence and corruptness of decisionmakers worldwide.
And such insurance (in form of hard assets) is becoming more important by the day.
I can only urge those with a sense of (or hunger for) reality or those who want to understand what this all means/how the political/financial world actually works to keep a close eye on a few websites :
www.zerohedge.comhttp://www.theburningplatform.com/http://www.roadtoroota.com/Finally, I can as well only urge anyone to review their spending habits. If you're a typical "consumer" that is used to live off credit cards or never thought about saving -
NOW is a good time to change that.
Things are going to get ugly and you don't want to be catched wrong footed on this one.
To give an impression that this isn't just me ranting or bullsh*tting around :
The knowledge gained during the last ~2 years has caused me to
- minimize spending
- maximize savings (outside the banking system !)
- shutdown my entire scientific network and sell it
- basically transforming from "comsumer" to "aware citizen"
Although I could afford it easily, no more need for latest hardware, cellphone or any other unneeded tokens/gadgets.
No need to panic either, but not the right time to relax, thinking they (politicians) will fix anything - cause they won't ! --- edit ---
And for those that DO have savings accounts etc., here's a mandatory thing you HAVE to consider :
- what is the
actual inflation rate ?
(at minimum, it will be the official, fudged CPI, realistically - it will be higher than that)
- what interest rate do I get for my savings ?
Chances are, if you're into classic savings - your real interest rate may be NEGATIVE (less interest rate than inflation). That means although the nominal number on your accounting may rise (looks good) - its actual VALUE (purchasing power) has actually declined.
Negative real interest rates, once understood and its consequences thought over, one can more easily grasp how banks/central banks win with inflation, while the end of the financial food chain (taxpayer) loses big.
And remember, interest rates are cumulative. The compound interest is an exponential function.
NEGATIVE real interest rates are as well. Go figure. Quote:Do You Know
What Baron Rothschild
Considered The
Eighth Wonder Of The World?
Compound Interest. Rothschild, one of the world’s richest bankers, was asked at a dinner party if he could name the Seven Wonders of the World. He said: “No, but I can tell you what the Eighth Wonder is. The Eighth Wonder should be utilized by all of us to accomplish what we want. It is compound interest.”
(Community Savings and Loan Association—ed.)
Quote:"The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit... In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value..." (Alan Greenspan, former Chairman of the Federal Reserve)
An image says more than a thousand words :
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