GOLD – The Road Less Traveled

Bankruptcy & Insolvency

Gold & Silver (real physical metal –
not paper promises) do not declare
bankruptcy and have no counter-
party risk. True for 5,000 years.

Investment Return Since 1/1/2000

Gold up from $285 to around $1,750 – about 15% per year compounded for 13 years

Silver up from $5.40 to around $33.50 – about 15% per year compounded for 13 years

SAFETY WITH GOLD & SILVER

Physical Gold and Silver – cannot be “printed”

Investment demand increasing

Central Banks are now net buyers

Huge demand for gold and silver in China, India, and Russia

Chinese government encourages ownership of gold by its citizens

Mine supply flat or barely increasing

US and Canadian governments mint gold and silver coins

FUTURE EXPECTATIONS

Gold and silver prices will increase substantially as the Dollar and Euro decline in purchasing power due to excess spending and Quantitative Easing (debt monetization or “money printing”).

Fear of inflation and loss of confidence in paper money, governments, and political promises will drive gold and silver prices much higher.

PAPER – The Road More Traveled

Bankruptcy & Insolvency

Lehman Brothers
Bear Stearns
Enron
AIG
General Motors
MFGlobal
Zimbabwe
Greece
United States
Hundreds more

Investment Return Since 1/1/2000

S&P 500 Index: down from 1,469 to about 1,430 – approximately no change in 13 years

NASDAQ 100: down from 3,700 to about 2,700 – about negative 2.4% per year compounded for 13 years

US Dollar: down from 0.8 gallons of gasoline to about 0.3 gallons of gasoline

US Dollar: down by about 60% in terms of retail food prices

MORE RISK WITH PAPER

Paper investments have counter-party risk.

Will governments or corporations pay on their promises?

Will stocks collapse if the economy weakens?

Will a derivative implosion crash the economy?

Will Congress spend the dollar down to a fraction of its current purchasing power?

Will consumer price inflation destroy the middle class of Europe and the USA?

FUTURE EXPECTATIONS

The dollar has lost about 98% of its value since 1913 and much of that loss occurred since 1971. Do you see anything that will change the trend toward continued monetary debasement?

Fear of inflation and loss of confidence in paper money, governments, and political promises will weaken the purchasing power of the Dollar and the Euro.