$5,000 Gold a Myth?
The Nestmann Group, Ltd.
by Mark Nestmann: The
IRS Wants Your Electronic Data
not try to predict the price of anything. Im not very good
at it. If I was, I would never have purchased a condo in 2007 after
its price fell 25%. I felt I was receiving a bargain. But five years
later its worth 75% less than I paid for it, even after making
$50,000 of improvements.
an object lesson here, too. My condo has the exist same utility
as it did five years ago, more in fact if you count the improvements
Ive made to it. Its value to me hasnt decreased. Its
value to others though has, as expressed via the price mechanism.
In 2012, I
think we will see a continuation and even intensification of deleveraging people,
companies, and governments borrowing less, and lenders tightening
credit standards further.
is inherently deflationary. This is a big reason why my condo is
worth 75% less than what I paid for it.
Gold is not
immune to the deleveraging process. That became apparent in the
fall of 2008 after the collapse of Lehman Brothers, when gold prices
fell 30% in 30 days. Its not surprising why this happened.
In a deleveraging process, debtors must liquidate their assets to
pay creditors. Since gold is a highly liquid asset, its easy
for debtors to sell it to raise cash.
happen again in 2012. If deleveraging intensifies, I believe gold
at $1,000/oz by year-end is a lot more likely than $5,000/oz. gold
or even $2,500/oz. gold.
banks will of course do everything they can to prevent deleveraging.
Its possible that the endless rounds of quantitative easing
will reverse this process. But Im not counting on them being
any more successful in 2012 than they were in 2011 to prevent the
European financial crisis, which, at its root, represents an enormous
not to downplay the importance of gold as the core holding of your
portfolio. Gold will never lose its utility as a store of value
and medium of exchange. Unlike dollars or other fiat currencies
it will never have zero worth. Assuming your gold is held securely
in allocated form, it has far more intrinsic safety than a bank
account deposit, a money market holding, or a promise to pay issued
by any government.
intensifies, so will deflation, but because gold is such an effective
store of value, it should fall in value more slowly than almost
anything else. Dont get discouraged if the gold price is closer
to $1,000/oz. than $5,000/oz. at the end of 2012. A lot of other
things, especially long-term bonds, could be worth a lot less.
looking to buy, sell, accumulate, transport, or store gold safely
and securely, inside or outside the United States, we can help.
Contact us for a consultation today.
with permission from The
Nestmann Group, Ltd.
Nestmann [send him mail]
is a journalist with more than 20 years of investigative experience
and is a charter member of The
Sovereign Societyís Council of Experts. He has authored over
a dozen books and many additional reports on wealth preservation,
privacy and offshore investing. Mark serves as president of his
own international consulting firm, The
Nestmann Group, Ltd. The Nestmann Group provides international
wealth preservation services for high-net worth individuals. Mark
is an Associate Member of the American Bar Association (member of
subcommittee on Foreign Activities of U.S. Taxpayers, Committee
on Taxation) and member of the Society of Professional Journalists.
In 2005, he was awarded a Masters of Laws (LL.M) degree in international
tax law at the Vienna (Austria) University of Economics and Business
© 2012 Mark
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