Nobody thinks about buying an umbrella when the sun is shining and the sky is blue, without a cloud in sight.
If we were totally rational beings, that would be odd. Because we know for a fact that it’s going to rain one day. And we know if we don’t have an umbrella before the rain starts, we’ll not only get wet but will also pay more when we run into a shop and buy that umbrella.
We are caught in that same, irrational mindset with gold right now.
Stock markets are going up. Employment numbers are looking better. And the world’s Central Banks tell us everything is under control.
So why buy gold? Gold is useful only when it rains.
Well, let’s go back to the Central Banks, and what they say.
They tell us everything is OK, and hope that we will bask in their reassurances in the same way we raise our faces to feel the warmth of the sun.
But everything is not OK. Trillions of dollars in quantitative easing have not created anything like the results intended.
Those trillions were meant to trickle down to main street in the form of loans and brave new investments. But that hasn’t happened. Cash is sitting in offshore accounts, and companies are spending money not on research and exciting new initiatives, but on stock buy-backs.
The QE money is not getting to where it is supposed to get.
And, as you know, none of that new money is helping us pay down our massive, unsustainable national debts. Quite the reverse.
In other words, while the sun may be shining right now, there are plenty of clouds in the sky, and many of them are of the dark, scary kind.
Still, most people won’t buy that umbrella until it starts raining, or that gold bullion until the next economic collapse.
Totally irrational.
But by being a little smarter, and a little more rational, you can buy gold bullion now and get it at a pretty good price, particularly if you live in the U.S. and buy with U.S. dollars. (Not quite so pretty for buyers in other countries who have seen their currencies fall against the dollar.)
Either way, now is a great time to buy gold. The price will rise when the economy starts “raining”.
One other thing. Have you noticed how hardly any of TVs talking heads are talking about gold right now? It’s just not a big story. Nothing much is happening. And that’s another good buy signal.
When all is quiet, and the sky is blue, it’s the perfect time to buy more gold.
Better now than when the weather changes.
About the author: DH Kenrick is a student of world economics and a committed gold enthusiast. Follow me on Google+