One of the things going on now is that the central banks are enforcing a low, read zero interest rate. The UK CB has now declared zero interest rate until 2016, when (it really should have said IF) employment recovers.
One of the things most observers of financial events and happenings/history, is that the lead indicator of financial bubbleS that burst are when there are low interest rates. So this is the environment we live in, that is one which has proved repeatedly to be one that creates bubbles that burst.
It is most interesting to contemplate why the CB's are creating such a historically "fragile" environment, when this is against the brief of the CBs? Desperation? ... the present experiments to manage the unsustainable debt levels of numerous countries, states, cities, are simply that. Experiments. IN a scientific sense, the present set of experiments are poorly constructed , poorly constrained and simply not thought through. In a scientific sense, such experiments generally end in failure. Of course economists are not scientists, and in fact a long way from it. Artists possibly...nothing against artists
Gold is money in a true definition of money. There is a large class of people who invest in gold because of its permanence. When all the paper experiments are blown in the wind of the next set failures of economics experiments, an ounce of gold will still be an ounce of gold. Same shine. Same weight.
If you are interested I can send you a Zimbabwe 5 trillion note. It is framed now. It devalued the time I walked from the bank to the general store in Harare.
So regardless how the journalists regurgitate the same observations, via cut and pastes...I think the story remains the same.
To me at the moment the biggest leveraged play is to buy shares in juniors in a position like AMX, GRY, PIR, OBS to name a few. (Speculative play for sure). Companies with gold in the ground, valued at a few cans of coke an ounce, but who can reasonably control capital raisings over the next 12-18 months. There is not a pressing need to go into production right now at these prices, so best keep the gold in the bank (ground, not a bullion bank), and if the targets are there, put some more ounces into the bank. But above all protect your cash position.
Just my humble opinion, and I have mentioned most aspects before. So not investment advice, certainly do your own research, and determine your spec exposure level and your time frame.
Good luck !
AMX Price at posting:
13.5¢ Sentiment: Buy Disclosure: Held
