Greater threat to your portfolio: stock market collapse or inflation?

We’ve been saying it for weeks: The stock market may be on the verge of a collapse. In fact, just this past week, Gary Savage, publisher of the “Smart Money Tracker”, called for it to crash “10-20% in the next five days.”

Maybe Savage’s prediction will prove to be right; the signs for a crash are certainly there. Of course, there is no guarantee that it will happen.

But what will happen, and what is happening, is inflation. The Dollars in your pocket, in your savings account and in your stock portfolio lose value with each passing day. So we all find ourselves in a rat race to grow our savings, not just to keep up with inflation’s pace, but to outpace it.

If you had $100,000 in investments in 2000, they would need to be worth $135,040 today in order to have the same purchasing power. That’s an increase of over 35%. Think about how your investments have performed since 2000. Has your stock portfolio increased 35%? (The S&P 500 hasn’t!) Have your IRA’s or 401(k)’s increased 35%? If those investments, or any others, haven’t increased by at least 35% since 2000, your savings haven’t kept pace with inflation.

Gold and silver have both increased over 400% since 2000. They’ve protected against inflation… and then some.

Maybe stocks will crash… but maybe they won’t. With inflation, however, there are no *maybe’s*. So if your savings aren’t at least keeping pace with inflation, you’re losing.

Gold and silver have proven to protect against inflation for thousands of years. Gold and silver have proven to outlast currencies for thousands of years. So if you don’t already have *at least a portion* of your savings in gold and silver, now is the time to get started. Call us today.

Precious metals on the move

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

• Gold: $1,386.00, down 0.6%
• Silver: $22.60, up 0.1%
• Platinum: $1,505.00, up 3.2%
• Palladium: $754.00, up 1.3%

In the news

“[Gold] will be around when everything else is in ruins.”
“What is the worst possible environment for investing? The Fed has given it to us – a low interest environment along with an eroding currency. That’s what we have now. At present there’s no perfect or even a satisfactory investment position. You are not safe in bonds, you are not safe in stocks, and you are not safe in cash. Which is why I choose gold. It doesn’t bring in income, but it will be around when everything else is in ruins. And if the whole current house of cards starts to fall apart, chances are that there will be a huge panic to own gold, which is out of the Fed’s and the government’s grip.” – Richard Russell (link)

Money printing “can’t solve anything”
“Most recently the housing bubble led to the collapse in 2008/2009, and now we’ve got QE of biblical proportions being foisted upon us by the Fed, Bank of Japan, Swiss National Bank, and probably the Bank of England soon, etc. The irony of it all is that 5 years into zero rates, and America alone (with) $5 or $6 trillion of deficit spending, the economy is still crummy. No one ever says, ‘Why is that?’ Well, the reason is because money printing doesn’t work.” – Bill Fleckenstein (link)

Markets hooked on “monetary cocaine”
Quantitative easing is “at best, pushing on a string [for inflation] and, at worst, building up kindling for speculation and, eventually, a massive shipboard fire of inflation.” – Richard Fisher, president of the Dallas Federal Reserve Bank (link)

Demand for gold coins at “unprecedented” levels
“Demand right now is unprecedented. We are buying all the coin (blanks) they can make.” – Richard Peterson, U.S. Mint’s acting director (link)

Chart of the week

Employment still near 30-year low

The week ahead

• Reports on U.S. retail sales and industrial production due later in week
• How will global markets react to lackluster reports from China over the weekend?
• Chinese markets closed until Wednesday
• Bank of Japan to hold policy meetings early in week
• Germany to release consumer price index on Wednesday