Here is a transcript of an email I received from my local precious metals dealer.
It includes the thoughts and opinions of John Adams, respected financial analyst.
It makes for interesting reading regarding investments and Covid.
:coffee:
It has been 2 months since we last spoke. Time does past by very swiftly. Unfortunately however, in Australia we are still saddled with the ongoing restrictions imposed upon us by the lawmakers of this country.
Lock-Downs Continue to Take Their Toll
As challenging as lock-downs have been for many Australians, and in particular those living in New South Wales and Victoria, my conversations with highly respected, qualified business professionals all around the world, are suggesting that they believe the ravaging signs of inflation and the destruction of our life as we knew it have only just begun.
The Australia that we knew and love appears to be changing on a rapid basis, and certainly not for the better. John Adams, our Chief Economist at AGAGA along with his family have experienced the full brunt of COVID-19 first hand on the front line of the lock-downs.
John was deemed a close contact and was placed under house arrest by the New South Wales government for two weeks. He shares his story in his latest interview with As Good As Gold Australia.
Inflation Underway
Inflation continues to accelerate, but remains for the most part, unreported by mainstream media.
Property values continue to head north at record rates during a pandemic. Can you believe it?
The driving forces of course are the historically low interest rates, and until very recently, the ridiculously easy accessibility to banking finance.
This combination always ends up in heart break when real wage growth falls well short of escalating prices. Demand shrinks simply through unaffordability, the bubble bursts and prices collapse, but your financial commitments do not alter.
Why are people not reading into this?
Governments of course and mainstream media are committed to kicking the can just that little bit further down the road in a last ditch effort to keep the economy intact. The consequences of this behaviour however will be dire, as history confirms over and over again.
Chinas Lehman Moment
Just this week, Chinas largest property developer has sent shockwaves through the banking and finance industry, confirming liabilities of approx. US$305 Billion and running into serious financial trouble as it faces a major liquidity crunch.
Shares in the company have collapsed by 80% and investors have stormed the company headquarters, demanding their money back. Some have jumped on the news, claiming it is Chinas Lehman moment. This is big, very big!
What will the Chinese government do?
Bail them out, as they have done in the past or let them self-destruct?
Either way, theyre damned if they do and theyre damned if they dont.
The consequences are going to be globally impacting, exposing the entire construction industry as being one built on unsustainable debt. At any moment, it can and will implode.
In the meantime, precious metals prices (both gold and silver) have been subdued by the banking sector and major financial institutions as a result of heavy manipulative forces. Our good friend, Gerald Celente confirms, As George Carlin once said, its a big club and you aint in it.
The game is rigged!
JP Morgan get caught rigging the precious metals market and get a slap on the wrist US$900 million and then go out and do it again.
So theyll continue to manipulate until they cant.
So when will that be?
I liken it to when the juggler takes on one more ball and loses control, and they all come tumbling down. Then its too late to acquire either gold or silver at any price.
Thats when we go from 1% of the worlds population being buyers of precious metals to 7%-8%, as was the case from 2007/2008 through to 2011.
Thats when the market is too big for the manipulators to influence any longer. Were getting close its anytime now.
Now more than ever, one needs to protect themselves from a reckless government policy of printing endless amounts of worthless FIAT currency, and the only proven plan to achieve this is by holding gold and silver.
Historically, both metals have proven to be the most successful hedge against inflation and represent the ultimate store of value.
Let me share an example with you that confirms the example of holding gold as an investment and insurance against a rotten financial system.
It will shock you!
Gold vs Real Estate
This illustration is based on gold performing at least as well as it has over the last 20 years, starting at the beginning of 2000. I believe the economy is in a much worse state now than it was during that period, leading to potentially even better returns moving forward.
The starting investment is $500,000, keeping in mind that many people have two, three, four or five investment properties of this value in their real estate portfolio.
So here we go.
At the beginning of January 2000, gold was valued at $430 AUD spot per oz.
Today, gold is $2,400 AUD spot per oz.
Thats 558% growth or 27.21% per year over the twenty-year timeframe.
Now lets allow our gold investment to appreciate over the next 5 years at 27.21% per annum.
Our portfolio is now worth $1,175,000 AUD.
Lets proceed.
In this illustration, I am allowing for the investor to liquidate in retirement at 20% per annum.
https://cdn-au.mailsnd.com/21037/j2hNjVsc_T5kWr_KADRil3CrSfDAz4k254ULtn5BE08/2614887.png
So, is gold better than real estate?
In this illustration at the beginning of each new year before your withdrawal, you have more equity in your precious metals account then at the same time in the previous year, and thats assuming that you liquidate the full 20% in one transaction at the start of that new year.
If you owned a million-dollar property freehold, your annual return would be around $35,000 per year before outgoings.
Ill let you draw your own conclusions.
Have you ever considered a SMSF (Self-Managed Super Fund)?
More recently, we at As Good As Gold Australia have experienced a huge level of interest with clients wishing to establish self-managed super funds (SMSFs), providing themselves with greater control and flexibility over their financial futures.
Gold and Silver Will Be A LifeSaver
May I confirm that gold today is as cheap in relation to US money supply, as it was in 1970 when gold was $35 USD, and in 2000 when gold was $300 USD.
For financial survival, physical gold and silver will be lifesavers as bubble assets like stocks, bonds and property collapse in real terms.
In closing, may I remind you of a quote by Former US President, Richard Nixon who said, 'the American people don't believe anything until they see it on television'.
Let's not make the same mistake!
I look forward to connecting again soon.