There’s one resource the world will never, ever run out of…stupidity.
Let this soak in for a moment…
California and Texas are in the midst of record droughts with one state having just a year’s worth of water left in its tanks. Yup, only so much oil you can suck out of the ground and under the oceans. Same thing with gold too…yet where things get exciting is when an abundance of stupidity is put into motion and starts jacking up the value of gold. And as you read through this article you’ll see exactly what we mean and how you can take advantage of it all.
Stupidity In Syria Sparks “Fear Trade”
Most people would agree war is a horrible thing. One side can claim “victory” yet, in the end everyone loses one way or another. This can absolutely be said with the Syrian Quagmire you’re watching unfold right now. Enter the Fear Trade. The Fear Trade is simply an index which was developed to measure the primary emotions investors use to drive their investing decisions. World events like wars, terrorist attacks and general political insanity will drive investors to choose certain investment vehicles. Gold is typically one of the “go to” investments investors look towards within the Fear Trade.
And guess who’s stirring the Fear Trade pot harder than any dummy politician out there? Meet Vladdy Putin…crazy politician extraordinaire. Here’s the story:
Putin seen here holding an ingot of gold like the Golum character in Lord of the Rings decided to dip his beak into the civil war raging in Syria. Whether he realized it or not the moment a Russian plane crossed the Syrian border it sent shockwaves of instability throughout the global commodities markets.
This Bloomberg chart shows the nearly an instantaneous value vaulting of both the Russian Ruble and Brent Oil. Well guess what happens to the price of gold? Historically it goes up, up and up. Have a look at this chart from the website Bidness ETC:
You can see at about the time Putin made the decision to enter into the Syrian conflict the price of gold spiked hard. And this seems to happen often when conflicts like Syria flare up on the map. And entering into dumb wars isn’t the only time the price of gold skyrockets…
Gold: The Ultimate Hedge Against Political Idiocy
One of the sharpest criticisms about politicians came in a New York Times article written by Floyd Norris back in 2010. In the article he says what I’ve been thinking and maybe you’ll agree…here’s the quote:
Or, as a friend of mine put it, ‘You are buying gold because it is the alternative to this collection of stupid politicians around the world. Norris writes. The reason why he’s pointing this out is because of the state of our world economy.
Nations including the United States are burdened with so much debt with Wall St. taking on insane bets on the subprime mortgage market and then passing it on to the taxpayers who then watch their government borrow, and borrow and borrow some more.
And here’s the point he makes so well…as we’ve seen time and time again our political system has broken down. Never before have you seen the idea of a government shutdown tossed around so casually. Congressional approval ratings probably haven’t found the deepest part of the hole yet and with an election coming up in 2016 one can only guess what’s going to happen. These guys can’t seem to get anything done…at all. Even things most Americans believe make total sense like rebuilding crumbling bridges and roads.
Yet, what makes gold such a great check against political stupidity is you have something with tangible value. Unlike fiat currency like our dollar gold is something which may fluctuate in value but considering today’s political environment it’s one of the safer bets you’ll ever make.
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