If the world’s governments and central banks continue to create unthinkable amounts of fiat debt instruments, gold’s price as measured against those instruments could well reach unthinkable heights. From Egon Von Greyerz at goldswitzerland.com:
It serves no purpose to hold gold.
Why should anyone hold gold when it has lost value against most other assets since 2009. At the end of this article, I will tell you when you must not hold gold and why I think gold will reach new highs shortly.
Making money is a cinch in today’s stock markets so why do I need gold?
For the investors who have managed to combine a good portion of luck with modest investment skills, they could have made 2,000X their money since 1997 on Apple or 2,170X on Amazon, also since 1997.
So $10,000 invested in both Apple and Amazon in 1997 would today be worth a neat $40 million.
BITCOIN IS UP 470,000X
And what about Bitcoin? If you spent $10,000 on Bitcoin in 2010 at 10 cents, you would today have 100,000 BTCs worth $4.7 billion. If you did, you hopefully haven’t lost your key.
But to rely solely on electronic entries on a computer or memory stick is clearly a very inferior form of wealth preservation.
Also, hindsight is a wonderful investment method and the most exact of all sciences.
Yet, you didn’t need to be an expert stock picker to make money in recent decades.
If you for example spent $10,000 on the Nasdaq in 2009, you would today have over $140,000 and that without selecting one single stock.
But by using 2009 as starting point, you will have conveniently forgotten that you had before that lost 80% on the Nasdaq since 2000.
So we can always prove the ultimate performance by choosing the right starting point.
GOLD – WORST ASSET CLASS SINCE 2011 AND BEST SINCE 1999
When gold antagonists want to disprove gold’s virtues, they choose the 1980 top as $850 as starting point. They then deride gold investors that it took 28 years before that level was reached again. They conveniently forgot to mention that gold reached new highs between1971 and 1980, going up 24X.
Stock investors could also point out that they have outperformed gold by 200% since 2011. But they forget to mention that since 1999 the Dow has lost 60% against gold (excluding dividends).
Again, this shows is that you can always prove the investment performance by picking a suitable starting point.
Still, it is an undeniable fact that gold has been the best asset class in this century.