The real meaning of gold. The world is now in a serious global recession. “Paper wealth” from the US to Japan to China is now crumbling. Any company can go broke, and any stock can decline to zero. A company can go broke by possessing debt that it can’t finance. A company can go broke if it has overhead that it can’t carry (the reason for all the firing). A company can go broke if it’s sales collapse. A company can go belly up if its products are uncompetitive.

One major reason why people own gold is that gold can’t go broke. Gold can’t go broke because it has no counter-parties or liabilities against it. Gold can’t go broke because gold is pure wealth. Sure gold can go down in price in terms of a currency, but gold CAN NOT GO BROKE. This is the crucial fact hat the “dollar-bugs” fail to comprehend. This is the reason why sophisticated wealthy people own large quantities of gold. Gold represents eternal unquestioned wealth. Wealthy people do NOT hold gold for appreciation. They don’t care about the price of gold today or tomorrow. That is not why they hold gold.

Then why own gold? Example, an investor who owns ten million dollars in stocks and bonds, knows that this is “paper wealth.” It can be here today and gone tomorrow. The same investor owns five thousand ounces of gold, worth almost five million today in terms of Federal Reserve Notes. This investor knows he will be “rich” no matter what. His five thousand ounces of gold means that no matter what, he will always be wealthy. This is the ultimate secret of gold. It’s the secret that the “dollar-bugs,” will never understand. The wealthy don’t worry about the price of gold as denominated in paper currency. Their only worry is whether they own enough gold to make them eternally rich.

What happens to gold in the face of a world collapse, when the price of everything — houses, commodities, stocks — heads down. Let’s say that the world and its assets are heading towards zero. That’s when owning gold is most important. Gold is the only asset that can’t and won’t join the crashing asset parade. Thus, owning gold is the ultimate insurance against utter disaster.

Quote: The total return loss for the 10 years ending March 6 is the worst 10 year performance in US stockmarket history including the Great Depression — courtesy of Steve Leuthold.