{"id":5265,"date":"2011-09-27T13:10:43","date_gmt":"2011-09-27T17:10:43","guid":{"rendered":"http:\/\/www.pgm-blog.com\/?p=5265"},"modified":"2011-09-27T13:10:43","modified_gmt":"2011-09-27T17:10:43","slug":"are-investors-running-in-the-wrong-direction","status":"publish","type":"post","link":"https:\/\/www.pgmcapital.com\/nl\/are-investors-running-in-the-wrong-direction\/","title":{"rendered":"Are Investors running in the wrong direction?"},"content":{"rendered":"

\"\"\u00a0\"\"<\/p>\n

\"\"Dear PGM Capital<\/strong> Blog readers,
\nSince July 22nd of this year we have seen the\u00a0major\u00a0global markets based on fear of a default of Greece\u00a0in\u00a0a\u00a0tailspin.<\/p>\n

As can be seen\u00a0in\u00a0below charts, in the first instance Investors run\u00a0to\u00a0precious metals like gold, sending the price of Gold to an all time high of US$ 1,920.00<\/strong> an oz, but during the last week we have seen Investors dumping gold and fleeing into USA Treasuries and by doing so sending the yield of the 10–<\/strong>year note to an all time low of 1.715% on September 22nd 2011.<\/p>\n

The big question most people are asking\u00a0themselves\u00a0is,<\/strong>\u00a0if \u00a0those investors fleeing into USA treasuries, are running\u00a0in\u00a0the wrong direction?<\/p>\n

\"\"\"\"<\/p>\n

Here below we’ll try the analyze the current global situation and provide you with our vision of the direction the world and global markets are heading.<\/p>\n

In our opinion the\u00a0flight\u00a0into the USD and US-Treasuries\u00a0is\u00a0temporary and investors\u00a0will\u00a0soon turn around in the good direction and put their money\u00a0in\u00a0the safe heaven of Gold, Silver, the stocks of their producers and other mining companies. The reason for this is simple: in a world\u00a0in\u00a0\u00a0which central banks and politicians are printing money at will to save failed institutions and countries,\u00a0that\u00a0printed money will become worthless and subsequently\u00a0inflation will shoot through the roof.<\/p>\n

Gold and Silver for thousands of years have functioned as real money until 40 years ago, when president Nixon decoupled the USD from Gold in order to be able to print money at will. Other countries followed the USA and also decoupled their currencies from Gold. By closing Gold Standard on August 15th 1971 and subsequent ended the Bretton Woods system<\/a>\u00a0of international financial exchange and going into a FIAT currency system, the world has placed the foundation for the current global financial and debt crisis.<\/p>\n

FIAT Money is nothing else than currency\u00a0that a government has declared to be legal tender, despite the fact that it has no intrinsic value and is not backed by reserves.<\/p>\n

Below a quote from Wikipedia on FIAT Money<\/a><\/p>\n

\n

Fiat money<\/strong>\u00a0is\u00a0money\u00a0that has value only because of government regulation or law. The term derives from the\u00a0Latin\u00a0\u00a0fiat,<\/em>\u00a0meaning “let it be done”<\/span><\/p>\n<\/blockquote>\n

The question most people are asking\u00a0themselves\u00a0is, “If the above is\u00a0true”,\u00a0<\/strong>why did Gold and Silver\u00a0sell\u00a0off that dramatically last week?<\/p>\n

The answer to this question is very simple.<\/p>\n

Global Capital Markets can be considered a very cruel animal, and the Gold and Silver ones are no exception. History will prove that the only intention of last week’s Gold & Silver market correction, was to professionally scare investors out of the market.<\/p>\n

We used this correction to add Gold, Silver, Platinum, Palladium and Rare-Earth elements to our personal portfolio and those of our clients.<\/p>\n

Last but not least, those\u00a0of you who\u00a0after reading this article still believe that\u00a0\u00a0USA Treasuries or Euro-Bonds are\u00a0still\u00a0the safe\u00a0havens\u00a0in the current world crisis,\u00a0please answer the following\u00a0questions:<\/span><\/p>\n