Washington, DC -- (ReleaseWire) -- 05/12/2016 --Gold exceeded $1300 again last week, a fifteen month high following the first time the metal broke the $1300 mark sixty-seven months ago on September 29th, 2010. There is enough momentum behind the move, too, that it could well keep going up. RBC Capital Markets released a report last Monday, May 2nd, saying that the upward trend in the market could push gold to over $1400. The precious metal trading firm Kitco has an ongoing online survey of "Main Street" investors. 660 people participated in the most recent survey, released on May 6th. Of those, 418 voters, or 63%, said they expect to see higher prices this week; at the same time, 159 people, or 24%, said they expect to see lower prices this week; and 83 people, or 13%, are neutral on the market. Wall Street investors were similarly bullish on gold, with 56% bullish on gold.
The question is, why? Why is gold looking to continue going up from its fifteen month high? I think the answer is simple. Investors are seeing the truth behind our so-called recovery, which is that it's just not a recovery. They are acknowledging the signs that we may be on the brink of an even greater collapse, despite the words coming from media pundits, government stuffed shirts, and the Federal Reserve. And in the face of deranged markets, the draw of gold is clear. Gold and silver have held many roles over history, but one significant one has always been as a hedge against turbulent markets. These days, the role of gold as a currency, competing against the dollar, the euro, the yen, the yuan, is coming back into focus as well: there is a gold-backed cryptocurrency (think Bitcoin) called the Hayek, and the IMF is backing some loans with gold as security against fiat currency.
Time again central banks, not least our own Federal Reserve, have inflated asset bubbles through their manipulations: credit, housing, now equities. And despite the consistent failure of free money and quantitative easing, they keep doing it, and many of us keep clamoring for it. But let's look at some of the fictions behind the state of today's equity markets. A full 25 percent of stock market gains follow the announcements made at Federal Reserve meetings. Globally, central bank intervention has led to trillions of dollars of asset inflation, in yen, euros, yuan, and yes, dollars. So, when you hear the media talk about a meltdown in "global" markets with an implication that the Unites States is somehow outside that meltdown, think again. U.S. corporations have borrowed billions of dollars at barely one percent in order to buy back shares of their own stock, a dynamic responsible for nearly 50 percent of recent increases in the stock market.
I wish we lived in a country that produces more than it consumes, that values personal responsibility and saving money, and I wish our government valued fiscal responsibility, but it doesn't. About half the U.S. is on the government dole in some form or fashion, with more than 45 million people on food stamps, and people are being paid by the government not to work. The people employed by the U.S. Government also enjoy huge salaries for what they do. We have trillions of dollars in debt and even more in unfunded liabilities.
In investment, "this time it's different" is often seen as a dirty phrase, but I truly believe that gold and silver are in a unique position right now, because in addition to being a store of wealth, a currency, and a hedge bet, these precious metals can serve another role: insurance. Insurance against loss of wealth, against the possibility of violent turbulence in collapsing markets, against governments being fiscally foolish, against the eventual breakdown of centrally-mandated policies driving economies whose realities don't conform to the theories behind those policies. And as with any kind of insurance, you can buy it and hope never to need it. Now is the time to do the research and search for opportunities and protective strategies. If you do your homework and can be comfortable with the fact that gold and silver can be volatile, consider putting 5 to 10% of your portfolio in gold and silver coins, or other investments in this historic and lasting asset.
For over a quarter century, the experienced advisors of Bennett Group Financial Services, LLC have been successfully guiding clients through the complexities of wealth management. Bennett Group Financial Services provides individual investors, corporations and foundations with holistic investment strategies using unique portfolio solutions across a breadth of asset classes. Our unique vision and insight into market trends makes Bennett Group Financial Services a much sought after expert resource with regular appearances on Fox News Channel, CNBC, Bloomberg TV, and MSNBC as well as being featured in Business Week, Fortune, The NY Times, The NY Sun, Washington Business Journal in addition to our highly regarded weekly talk radio program - Financial Mythbusting. Through attentive service and prudent, thoughtful advice, Bennett Group Financial Services, LLC strives to consistently provide its clients with the highest quality of guidance and personalized service available.
About Dawn Bennett
Dawn Bennett is CEO and Founder of Bennett Group Financial Services. She hosts a national radio program called Financial Myth Busting http://www.financialmythbusting.com.
She discusses educational topics and events in the financial news, along with her thoughts on the economy, financial markets, investments, and more with her live guests, who have included rock legend Ted Nugent, as well as Steve Forbes and Grover Norquist. Listeners can call 855-884-DAWN a as well as take podcasts on the road and forums for interaction.
She can be reached on Twitter @DawnBennettFMB or on Facebook Financial Myth Busting with Dawn Bennett.