The Numbers Are Quite Profound: Debt, Devaluation, Diversification and Gold
April 7th, 2013
With the global economy, financial markets and political sentiment seemingly on the brink of a major paradigm shift, concern about how to protect wealth is growing exponentially. Billions of dollars are being transferred out of bank accounts across the world by people who are looking for safety assets where they can secure their life savings and get out of the cross-hairs of governments bent on destroying private business, accumulating unimaginable levels of debt, and impoverishing the middle class.
There are few investments that will remain safe once the masses realize they’ve been conned by their respective leaders and financial authorities.
Whether your strategy involves holding physical assets to preserve some level of value and wealth when the next bubble pops, or if your aim is to reallocate investment capital from existing retirement funds or savings accounts and grow that capital over the long-term, the following interview from Future Money Trends is one you don’t want to miss.
Amir Adnani, chairman of gold mining company Brazil Resources, and David Morgan, of Silver-Investor.com, share a wealth of knowledge and insights about gold fundamentals, investment strategies, effects of monetary policy, managing a successful business, avoiding government nationalization of key industries, and the broader economic outlook going forward.
What excites me the most about the long-term, if we want to look five or ten years out, is that the supply-demand fundamentals, which is the only that I can try to use as a long-term guide of how things are going to go, are really on the side of higher natural resource prices and commodities.
When you look at the population trends in the world, when you look at the sovereign debt issues in the world, when you look at the organization themes of emerging markets… these themes are very long-term trends. These are not going away.
…I think supply-demand fundamentals over the next five or ten years definitely favor higher prices for commodities…
Amir Adnani (www.BrazilResources.com)
Amir Adnani and David Morgan, with Daniel Ameduri (Two Part Interview):
Despite the inevitable disaster to come, there are strategies that can help you to not only preserve wealth, but grow it during a time that will see the majority of the world’s population further impoverished.
If one of your primary objectives is to protect your assets during times of uncertainty, then consider some of the analysis from one of the world’s top junior mining CEO’s.
The fundamentals for gold:
The fundamentals for gold have never been as good as they are right now, because from the physical side of things the mining industry and the majors keep spending more money every year on an accumulative basis on exploration, and each year they keep finding less gold than the year before or ten years ago. And so it’s becoming tougher and tougher to find economic gold projects… So clearly, just on the pure mining side of it, the pure supply expansion side of it, it’s more costly to find gold. They’re finding less gold, and mining costs to get it out of the ground are rising.
Meanwhile, we continue to achieve record levels of debt in the Western world, so that continues to drive the monetary aspects of it and further underlines that end of the argument as to why the fundamentals for gold are strong.
Look at the latest issues in Europe. Look at the latest issues in Cyprus. The sovereign debt issues are not going away. Everyone is racing to try to devalue their currency throughout the world.
How can we not look at this picture and say to ourselves that the fundamentals have never been better… the numbers are quite profound.
Amir Adnani (Chairman, Brazil Resources)
When developing a strategy for asset diversification, consider your individual needs, existing capital, and your specific goals (preservation vs. wealth creation):
Is just owning physical a good idea or a bad idea? I think the real answer to that is the individual…
I think there’s more opportunity in the mining sector to build wealth than just owning the physical.
I think that it’s an individual choice. I’m not against it. I understand the reasoning. These people believe that all paper markets are going to crumble at some point and the only left standing will be physical.
I don’t hold that view. Personally, at my age, I think that about a 50-50 mix is about right. I feel very comfortable with 50% spread out between top-tier, mid-tier and up-and-comers, and the other 50% in the physical realm.
Just to be clear, I don’t advocate 100% of your assets invested in the precious metals sector. I have recommended 20%, but again that’s an individual choice.
David Morgan (Silver-Investor.com)
For more interviews from leading financial minds, analysts and influential business leaders visit Future Money Trends.