Are the hard assets your best defense against central bank money printing
Paper assets are the creation of human beings. Hard assets owe a lot more to something that has nothing to do with the sophistry of mankind.
You can print money, share certificates or bond IOUs. You cannot produce silver, gold and oil out of thin air in a financial crisis. You can build new homes but the real wealth is tied up in the massive existing stock of property around the world.
The art of investment in today’s world is surely to exchange paper for hard assets and watch the price go up. And as the price of hard assets goes up that means paper is devaluing or inflating away.
Over 100 years the US dollar has lost 98 percent of its value. All currencies tend to do the same thing over time. This is how government’s secretly confiscate wealth and spend it on wars and social services. However, we are living in a period when governments and their central banks are having to accelerate this process. That is because the world has accummulated too much debt. To inflate away debt you issue more money, as simple as that.
Therefore you want to get your money into hard assets as soon as possible. Gold and silver have tripled in price over the past five years. Oil is up fivefold in the past decade. Housing exploded in price and then slumped but is still more valuable than a decade ago, not something you could say for the dollar in your pocket.
To do best as an investor you want to buy your hard assets when the price is low. On that premise real estate in many countries (though not the UK or New York) is now looking cheap. Check the rental yield to be sure.
Of course investment is always an art and getting the timing right for a particular hard asset is going to be tricky and you need to select from the many investment vehicles carefully. This is what the ArabianMoney newsletter offers to subscribers that is not available on this website.
- Where should you be putting your money in 2014?
- Your investments: if it sounds too good to be true, it probably is!
- Now silver is your ticket to wealth
- More valuable than gold or property at home? Overseas Property beats gold as more popular asset for UAE residents
- Saxo Bank Q4 Outlook 2011: Fasten your seatbelts, we’re heading to Crisis 2.0