Whether the predictions of an economic collapse are true or not, preservation of your wealth should be a priority for everyone who is a producer. Wealth has been maligned as evil by the media and government who want to redistribute the fruits of our labor to the less fortunate (looters). Wealth that is earned honestly is the very essence of the American Dream and there is no shame in preserving your property. In fact, it was one of our founding principles that the individual should have the right to own property.
Financial advisers will advise you to diversify and their credentials may warrant their commissions. However, the old Watergate adage “Follow the Money” is still applicable. While China is adding over 100 tons of gold per month to their reserves, so are other Eastern European and Far East countries. In this case, following the money leads us to a simple conclusion: the money is being converted to gold.
Gold has risen 5.44 % in the past year compared to a 4.76% gain for the Dow Jones Industrial Average. Although the gains are fairly close, the future of gold (in my opinion) is the better choice. Once the Federal Reserve stops propping up the stock market (POMO) and the manipulation of the commodities markets is realized, people will see what world governments and central banks already know.
Turkey raised its reported gold holdings by another 2% in the month of May. Turkey’s gold holding rose by 5.7 tonnes in May to total 245 tonnes, International Monetary Fund data showed, making it the latest in a string of countries to increase gold bullion reserves this year.
Russia expanded its gold reserves by 15.5 metric tons in May as Ukraine and Kazakhstan increased their holdings of the metal, International Monetary Fund data shows according to Bloomberg.
Russia’s bullion reserves climbed to 911.3 tons last month when gold averaged $1,587.68 an ounce, data on the IMF’s website showed. Ukraine’s climbed 2.1 tons to 32.7 tons and Kazakhstan boosted reserves by 1.8 tons to 100 tons, the data show.
Central banks are expanding reserves due to the Eurozone debt crisis and concerns about fiat currency debasement.
Central banks are on course to buy more bullion this year than the purchases of about 456 tons in 2011 as countries diversify their reserves.