The US economy is currently tussling with financial crisis after the Great Depression. Similarly to the previous 1929 worldwide economic downturn, marked with immense bank failures and stock market collapse, the country is once again encircles with unforeseen bankruptcy of huge trusted banks and extreme market volatility.
There are many prime causes that lead to the current US financial crisis and gradually affecting the global economy. During a recent media round table discussion at Public Gold, Mr Pang Bo Fu, the President of International Consumer Federation for Businessmen in China, who foresees US to encounter a drastic economy downturn very soon.
“US economy is expected to be affected severely as US has been printing paper money far too long since 1971 without proper planning. This in return causes the depreciation of the country’s currency. Moreover, they also invested too much money in the form of bonds, stock market, and property, which will become worthless and bring down the country’s economy. Under these circumstances, only raw products primarily physical gold is the most secure form of investment and could retain its value regardless of inflation or economy slump”.
China is among one of the primary countries that invested two third of its reserve in US Dollars, mostly US treasury bonds and agency bonds. Based on English.xiahuanet.com, the current total of China’s Treasury Holdings in US Treasuries is approximately $1.2 trillion. If China were to continue investing its reserve in US treasury bonds and agency bonds, they will continue losing money. And the best solution to counter this issue is to substitute investment in bonds with physical gold.
Countries affiliated with the US treasury bonds including Malaysia are expected to land in the same scenario as what US is likely to face, which is the collapse of economy. Nevertheless, an investment in physical gold would be the most suitable form of investment to overcome the crisis.
Mr Pang Bo Fu added, “In comparison with physical gold, other resources such as petroleum, property, bonds have lower value. Everyone should start buying physical gold because it provides the best hedge against inflation or any economy downturn. Therefore, investment in physical gold is the best solution should there be any economy mishap occurs in the country. To invest in physical gold, the public can always turn to Public Gold as it provides the perfect platform for investors to invest in gold and silver”.
As what Public Gold Executive Chairman, Dato’ Louis Ng said, “Gold is the king of all. It provides the best preservation of anyone’s wealth for the betterment of the nation and its citizens”.
Adapted from
http://www.stock-market-investors.com/stock-investment-risk/what-caused-the-current-financial-crisis.html
http://news.xinhuanet.com/english/china/2012-05/23/c_131605050.htm
what about won the olimpic gold medal. sure kaya one in malaysia
Kaya because he worked hard, not because he have the gold.
The gold dealers are lying in their statements.
They claim gold is more valuable than oil? This is totally not true.
Maybe it is also more valuable than water they would say too.
The financial crisis is not due to paper money printing, it was due to GREED.
Greed is not good.
Gold is also not the most secure investment. Its value can change dramatically.
How many people had lost money buying gold? There are many and there are many scams too. Even banks are cheated, it is definitely not the most secure as claimed.
Have anyone who bought gold, checked the content and purity of their gold? If not, then how sure are you that it is pure as claimed?
From Book 1 of the Series,
In the year 2000 if you take a loan of 300,000RM, today your loan should be about half of its amount left. If gold is used as money however, your loan will not go down by half, it will go up by 7x, to RM2.1 million. Your repayment amount will go up 7x too, so you will go bankrupt and they will take all your possessions.
People always confuse gold as an investment. Gold main function is to preserve ones wealth. Meaning an ounce of gold thousands of year ago can buy u the same thing as an ounce of gold today. (Example 1 gold dinar can buy u a goat 1400 years ago and the same as today) . Gold are useful when you local currency loose purchasing power due to inflation/economic crisis/currency war etc.
The fact is currently we are in a commodities bull market where all commodities be it oil, gas, wheat, corn, oil palm, rubber, gold etc are rising in price denominated in all currencies be it USD,Euro,Yen,Ringgit etc. Going for gold standard(gold as money) right now is not good as the banks will get all the gold and left people with nothing.
Interesting observation that you are making.
However take note that the rising prices of commodities are not simply due to paper money, but due to supply of those commodities unable to meet demands.
I agree that implementing gold standard will be ruinous for the world.
So on this count, gold is not a good investment indeed.
Many people want to preserve their wealth by using gold, however in the Quran, God has stated that Muslims are not allowed to store gold this way. Check out Surah AtTaubah.
When I do the math, i can prove mathematically why keeping your wealth within gold, is not good for your, your country, and the religion.
A value of an asset, is determined by its wealth generation potential, i.e. the P/E. For gold, because it does not generate anything, the value (the P) is essentially zero. This is proven by math alone.
So what is the best way to preserve one’s wealth? The answer is very simple.
Most of the main commodities exchange we have in the world today operate on margins and can settle payment in cash not the commodities it self. So the decline and increase of the price is sometimes artificial as most of the players in the exchange are speculators.
Islam never forbids muslim to keep their wealth in gold. What it forbid is if they didnt pay zakat for their gold. Trying to calculate a P/E is not fair for gold. The same if we calculate P/E for ringgit or us dollar.
In times of economic crisis, priority is for wealth preservation not wealth generation. Thats where gold function is.