Gold has now outperformed equities for 2012, and though we’re only halfway through the year, there’s good reason to believe that precious metals will continue to hold or outperform stocks. Here are the reasons why:
1) Japan’s aging population and recently renovated-through-natural-disaster infrastructure is under-performing and will directly affect our ability to sell electronics and consumer goods, (the drivers of our economy) including cars, one of the few bright spots in the American economic landscape.
2) China’s economy is slowing. After decades of double digit growth, China’s economy slipped into single digit territory. It’s the first sign that the super-heated Chinese economy is, not just cooling – the real-estate bubble and the political infrastructure that created it are coming undone. The bubble is bursting.
3) Consumer debt in the US is again on the rise. Recent consumer debt reports indicate that credit card use, which dropped dramatically after legislative changes were made, are up. Visa reported an 8% rise in credit card use YOY for the quarter. After a couple years of hunkering down and paying off debt, Visa’s report, plus new reports of an 8% increase in 90 past due student loan payments indicates that the US consumer is back on the debt road to Poorville.
4) The recent jobs report indicated that the anomalies of the past few months were just that. Non-Farm Payrolls, (NFP) added just 66K jobs, something near half of what was expected and that light at the end of the tunnel appears to have been an onrushing train.
All of these reasons don’t mean you should rush out and buy lots of gold and silver from your local gold buyer. You SHOULD consider diversifying your portfolio with some gold or silver so that if the market continues to tank (which is very likely to happen) your wealth, even if you have limited savings, will continue to at least hold its value.
Gold is available in small quantities, too. US Gold Eagle come in half ounces, quarter ounces and even tenth ounce coins. So does the South African Krugerrand…little by little, you can acquire a commodity the continues to confound investment experts by holding it’s value for long periods of time.
You don’t have to buy gold to come in – you can investigate the process, learn more about the opportunities. You can talk, you can figure out what your options are. Recently a young man came into our offices to buy US Silver Eagles and left with lots of junk silver after a long discussion on the merits of both.
Different people have different needs in terms of their precious metal diversification plan. Your portfolio would look better today if it contained gold and silver. Gold is in positive territory for the year, silver is close behind and stocks are not. Maybe it’s time to buy some gold? Contact Houston Gold Merchants for more information. 832 259 7225
