Why Karatbars Gold?
Gold is Genuine Wealth - Gold is Real Money
Throughout history, no paper currency has survived in its original form. Paper currencies are normally inflated away until they are worthless. The purchasing power of the US dollar has declined by 90% since 1950. The situation is the same for most currencies. When governments come under financial pressure they can never resist printing money to pay for debts, be it war debts or just excessive spending.
Gold is the only currency which has no liability attached to it.
So far no paper currency has survived intact over a longer period, while gold has represented real money for several thousand years. When paper money fails, investors who own gold still have a currency which holds its value despite the fact that banks may be bankrupt. Iceland is a recent example of how paper money can lose its value over night.
With massive levels of debt combined with money printing in many countries including the USA and the UK, the risk of a similar default in other countries is very high.
Gold has, at all times, represented real wealth as well as being a medium of exchange. “Old Money” has always maintained a percentage of its wealth in gold since the specific characteristics of gold make it probably the safest and most attractive investment for storing and preserving wealth.
Gold stored outside the banking system should be the foundation of the wealth pyramid for high net worth individuals. Therefore, physical gold or silver should not be considered as an asset which is valued or traded on a daily basis.
Gold – an Excellent Investment.
Over time gold has represented an excellent investment that holds it value in real terms. In particular, gold appreciates during periods of high inflation and financial instability. As there is a limited supply of gold, it cannot be printed to finance the deficit spending of governments.
Gold can act as a critical hedge both against inflation and a deflationary financial collapse.
The world is currently facing a crisis of unprecedented proportions. The financial system is fighting for survival and has been temporarily rescued by governments printing unlimited amounts of money.
There are only two possible consequences of these actions:
Either governments succeed in temporarily rescuing the financial system by printing massive amounts of money (This will lead to inflation or hyperinflation making paper money virtually worthless).
or if this fails, there will be a deflationary credit collapse which will lead to a systemic failure of the financial system.
Both of these outcomes will be extremely bullish for gold which always benefits from money printing and high inflation. In the Weimar Republic in the early 1920′s, gold went from 100 DMarks per ounce to 100 trillion DMarks per ounce. In the case of a deflationary collapse, many or perhaps most banks will fail, while gold stored outside of the banking system will be the only safe money.
Gold Return
Since 2001 gold has had an outstanding performance with total returns of 300-500% depending on the base currency of the investor. A $1 dollar investment in gold in 2001 would have yielded 350% or a nearly 13% compound annual return. For a Euro investor the return would have been over 200% total since 2001 or nearly 10% compound annual return. In spite of the 5 week spike top in 2011, these are outstanding long term returns outperforming most other investments during the same period.
Gold tends to move in cycles of at least 12 to over 20 years and should therefore continue to increase in value substantially for several years - at least. But gold should not be measured on a daily basis. Instead it should be considered as a long-term core holding representing the foundation of the wealth pyramid.
