According to Mike Maloney, author of “Hidden Secrets of Money,” everybody should be buying gold. At the time of writing, bullion is selling for $1262 per troy ounce, a 34 per cent drop below the 2011 record high.
Gold may not be performing at its best at the moment, but long-term investors can expect a windfall within the next seven years – if history repeats itself.
Gold always recovers and the only reason prices have taken a tumble is because the currency is performing well.
Since the US senate lifted the debt ceiling, the dollar has gone from strength to strength and is maintaining a strong position. Traders are also wary about the Federal Reserve´s tapering program which is designed to fuel the economy. As a result, confidence is growing elsewhere in the market and investors are looking for opportunities other than precious metals.
Drop in gold prices is a good time to buy
The fall in gold prices however is a great time to buy for long term investors – and if Maloney is right, you are going to need it. During his research, Maloney found that national currencies are “fiat currencies” which are based on faith rather than backed by something of value as was the case during the days of the gold standard.
Maloney also found that fiat currencies always fail and subsequently change every 30 to 40 years. The last time the monetary system changed was 1971. So are we about to witness a new currency that is used as a benchmark for other world currencies? Maybe!
The US dollar may be doing well at the moment, but many analysts believe this is a false economy and the US dollar will eventually collapse. Given the US dollar represents more than half the value of the world´s currency, the global economy will plummet into a deeper crisis than the 2008 crunch. With the US debt ceiling holding over 17 trillion dollars and accruing around $328 billion a day, a collapse is inevitable.
New world currency
When the US dollar collapses there will be two options. The Chinese are pushing the yuan forward to be the benchmark for global currency. With China´s economy in such strong form, this would seem a sensible option due to the high volume of manufacturing and production coming out of China.
The other option is to have a single world currency, something which central banks and leading world governments will push for as part of the plan to introduce a world government as part of the New World Order – or as it says on the US one dollar bill “Novus Ordo Seclorum” – a new order of the ages.
Hopefully the change to a New World Order will bring peace and prosperity, but for the transition to occur successfully there has to be a dramatic collapse of the current banking system to justify a change. During the transition the economy will be weak again, but investors with gold reserves in supply will have a sound investment to fall back on.
Throughout history, gold and silver have always performed well during a financial crisis. True to form, when a currency is doing well (the dollar) investors take more risks in other areas, thus precious metal prices drop indicating now is a good time to buy gold.