There’s been some big news in the headlines the past couple of weeks:
Germany Repatriating Gold From NY, Paris ‘In Case Of A Currency Crisis’
Japan’s ‘beginning of the economic end’
U.S. should heed the UK’s economic woes
[U.S.] GPD reverses course into negative territory
Why Currency Wars Might Be Coming
What all those headlines should read is: “Attention: Time to Get Your Sh*t Together!”
Because that’s what it all boils down to, the real message behind these events — which, by the way, are not mutually exclusive…
Global currency woes, central bank distrust, and gold repatriation are all intertwined in a complicated web of fraud, bad policy, and consumer faith.
The good news is these events all impact the physical market for precious metals in a profound way.
That said, it’s time we revisit an important history lesson in order to plot our next move as investors.
Portugal’s Lost Gold
Back in 1990, Drexel Burnham Lambert — once the fifth-largest Wall Street investment bank — filed for bankruptcy as a result of illegal activities in the junk bond market. Michael Milken was blamed for the high-risk junk bond trades and the ultimate demise of Drexel.
What most of those people didn’t know at the time was that Portugal’s central bank had loaned 17 tons of gold to Drexel. When the bank failed at the hands of scheming banksters, Portugal’s gold holdings were washed away, unable to be reclaimed.
Imagine Portugal’s dismay and frustration at having to learn the hard way that you can’t trust big banks. (And it could have much far worse — gold was trading around $380/oz then, as opposed to today’s price of $1,660/oz.)
This time, people are invested. People are paying attention.
And the scenario for gold is changing across the globe…
According to Keith Barron, geologist and consultant responsible for one of the largest gold discoveries in 25 years:
I believe that most of the Western world’s gold, which is supposed to be in central bank vaults, has been leased out. Much of it is now in private hands in India, and what remains continues going East to China and other Asian vaults. So most of the Western gold has vanished from the vaults and it’s now just a book entry. These various Western countries and bullion banks simply roll these leases over when they come due, and the gold never gets returned back to the countries.
So it’s very interesting to see what’s going on. Obviously the trust is breaking down in the system.
The yellow metal is looking better by the day.
Germany Won’t be Duped
When it comes to Germany’s gold reserves, the Germans won’t be taken for the same ride Portugal endured in the 90s. That’s why Germany is demanding their gold holdings be returned from the central bank in New York.
Germany is shaking up the gold market in a major way, the likes of which we’ve never seen before.
If you’re smart, you’ll keep your eyes glued to gold’s every move in the aftermath…
Events like this are historically bullish for gold.
Investors were presented with some good buying opportunities following a few shortfalls this past week after analysts used technical analysis and global events to validate gold’s long-term potential in lieu of recent price dips.
Previously-sagging prices are already beginning to spring up again on “dovish remarks” from the Fed on Wednesday.
Top that off with a negative GDP, and it sounds like a further dose of quantitative easing is imminent.
We’ve been beating this drum for some time, but it seems as relevant a message now as ever: Protect your wealth and hedge inflation as the Fed fires up the printing presses for a fourth time.
The unfortunate truth is Germany can’t stop the banks from ongoing deception scams, shameless lies, fiat currency scams, or bailout manipulations…
But the investment culture has shifted. Big bank trust is headed toward extinction. Taxpayers are fed up with the fact that the government continues to protect these institutions. And thanks to Germany’s aggressive demands, the government and the Fed alike are losing their power to keep people in the dark.
Smart investors are finally motivated and angry enough to to take matters into their own hands — by going after the only thing they know the government can’t create more of: precious metals.
Best wishes for a prosperous future,
Brittany Stepniak for Wealth Daily
By Brittany Stepniak
Sunday, February 3rd, 2013