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How quickly some things change.

Last week it was inevitable that the United States would launch missile strikes against Syria, so in our previous Market Update (3 “under the radar” stories you must know about) we all but glossed over the story. We figured, what was there to say that hadn’t already been said? It was the same narrative: The U.S. would attack and precious metals would experience the same short-term spike that they almost always do when we go to war.

Just one short week later, things have changed significantly. With an attack looking less likely (at least for now) on the back of world leaders hashing out a plan to eradicate Syria’s chemical weapons, gold and silver have experienced a short-term pullback, ending the week down about 5% each.

How quickly some things change, indeed.

But how steadfastly consistent other things are.

Yes, gold and silver are down on the latest news out of Syria. That’s this week. What about next week, next month, or next year? None of us know what will happen, and that’s why here at Birch Gold Group, we never suggest that you buy or sell precious metals based on the unpredictable events that shape our day-to-day lives. At Birch Gold Group, we don’t suggest you invest in gold and silver for tomorrow; we suggest you invest in gold and silver for the long term, to protect your savings from the “fact of life” that is an eroding dollar. And when you view physical precious metals from this perspective, not over the course of days or weeks but of many years or decades, gold and silver are in a class of their own. No currency, no stock and no bond can match the track record that gold and silver have compiled these last several thousand years.

Richard Russell, in his Dow Theory Letters, recently posed this question:

“If you were going to leave your kids something to be opened 100 years from now, what would you leave them? There’s only one answer: fifty pounds of gold. Not a Picasso, not rice, not dollars, not Swiss francs – gold.”

So we ask you to take an honest moment to reflect: If you could bet on just ONE way to store your wealth for the future, whether it’s 10 years from now or 100 years from now, what would that be?

To us, it’s a simple answer. And if you too believe that precious metals are the ONE savings vehicle that makes the most sense for the future, then you need to call us today: (800) 355-2116. We’re here to help.

Precious metals on the move

London Fix PM price at week’s end, and change over previous Friday:

  • Gold: $1,318.50, down 4.9%
  • Silver: $21.72, down 5.8%
  • Platinum: $1,441.00, down 3.8%
  • Palladium: $700.00, up 0.1%

In the news

Gold: The only honest currency when paper currencies are not
“I believe the US economy is weakening, and if it gets worse [the Federal Reserve] will have to even increase [Quantitative Easing], maybe even to $150 billion a month. In terms of investment, there is nothing safe any more. The US money-printing has distorted all asset prices while cash in the bank has not given you any return when inflation is adjusted…. I think people should have 20 per cent of their money in physical gold, not gold papers. I would put the gold bars into deposit boxes at banks. Don’t speculate but buy regularly and keep them safe. We live in a volatile period. Gold is not like other commodities, it’s the only honest currency when paper currencies are not.” – Marc Faber (link)

Fed dancing with the “devil of inflation”
“The Fed is dancing with the devil of inflation by promising to keep money too cheap for too long. Disappointment is bound to follow – either now on a harder-than-expected taper or in the future, when inflation kicks up and the Fed has no choice but to tighten short-term rates faster than the market expects.” – MSN Money columnist Anthony Mirhaydari (link)

Fed will get its inflation, and here’s who will pay
“The Fed and other central banks are hardly going to be touching short-term interest rates, which will remain negative in real terms for years. So financial repression will remain the order of the day, until the Fed gets what it wants – which is inflation expectations heading up to 2.5 per cent. This surreptitious default move is one peg in the restoration of a more comfortable debt to GDP ratio. But the policy-driven move towards higher inflation will help devalue the outstanding real level of what are still huge liabilities. That is not price stability: it is more bad news for pensioners and those who live on fixed income investments, and good news for Uncle Sam and other debtors.” – Economist David Rosenberg (link)

The United States is sitting on an economic “nuclear bomb”
“Our country is broke. It’s not broke in 50 years or 30 years or 10 years. It’s broke today. Six decades of take as you go has led us to a precipice. That’s why almost the entire economics profession is talking as one at www.theinformact.org. Economists from all political persuasions are collectively sending our government a warning about what is, effectively, a nuclear economic bomb. I’ve been around economics for a long time. I’ve never seen such a strong response to a proposed Congressional bill. This is the profession sending a statement to the President and Congress that’s not unlike the warning physicists sent via Einstein to Roosevelt about the bomb.” – Larry Kotlikoff, William Fairfield Warren Professor at Boston University (link)

Jumping Chinese gold imports on pace to 1,000 tons
“Physical gold demand in China has clearly picked up in July, after gold prices hit the year to date low of $1,181/oz on June 28. This increase in demand helped contributed to bullion’s price recovery to over $1,300/oz at the end of July.” – HSBC (link)

Chart of the week

Total return performance of major global financial assets since Lehman’s bankruptcy
(Hint: It’s gold and silver.)

return global financial assets since lehman bankruptcy gold silver