Buying the poor man's gold

During the get-a-life-day (WoW maintenance day) on 1 March, I went out for a steamboat dinner at Ang Mo Kio central with Jia Lun. As usual, the topic was on how bad our job sucks and the doom and gloom in the world.

So it eventually boiled down this. With all the bad stuff happening in the world, is there anything we can do to take advantage of the situation? It wasn't long that the topic shifted to gold and silver, and particularly silver.

While trying make comparisons between FX, commodities, gold and silver, I found myself selling the idea of investing in silver more and more.

Why buy shiny rocks?
1) But shiny rocks are not sexy! Nobody buy rocks! They have limited industrial uses, and do nothing but shines! Gold and silver are the REAL money acknowledged by civilisations across the world for thousands of years. Fiat currencies are not, which lead us to...

2) While you can mine gold and silver, you can print paper currencies even faster. In the age of computers, you don't event need paper to print "money". Some broke central banks can go to a computer and add a couple of zeroes. Can you do that with gold and silver? Nope. Ever heard of quantitative easing? Money supply? Or the scale of the rampant money printing? US, UK, China, Europe and Japan...just to name a few are printing money out of the air faster than ever. Hyperinflation will come, it's a matter of time.

3) While the golden brother is obviously the most popular choice for investment, silver price movement is closely correlated with gold. This correlationship lead us to ...

4) Silver has more upside to it. The gold silver ratio will send it higher. Silver is a lagging brother behind gold, and the pull towards gold is not over yet.

5) And of course, I cannot afford to buy gold. At USD$1400+ per ounce, it's way beyond my means. The poor man's gold, still shiny without the golden halo works well at USD$34ish.

6) Nay, putting my $$$ in the bank is safer...until you realise that due to inflation and the useless saving rates, you are actually losing money by doing so. By the power of inflation, for every $100 you have in the bank, you automatically lose $2.80 annually (2011 projected 2.8% inflation rate for SG). Ouch? Or put it the other way, if you don't get at least a 2.8% pay raise this year, you are actually working for less. Everything you own, cash in bank, property etc loses value in the same way. What else can you do? Demand a pay raise! Bang tables, flip tables, smash something!



Finally the next day, I ran out of reasons not to buy silver. I went to UOB and opened a silver savings account with some of my savings which were rotting in my POSB account. So enjoy the chart below of my journey with the shiny rock.

Impact on markets due to recent events

Reuters has a nice interactive graphics on the effects of the recent events in Egypt, Libya and Japan.

Reuters lovely chart here

*Hint...buy silver now*

Sayonara Japan, maybe forever

Last year in November 2011, I had a vacation in Japan with my sisters. While trying very hard to stick to our itinerary and avoid getting lost in Tokyo city, I made a remark to my sister, Shiyun that the Tokyo that we were looking at was likely to be at its peak in modern history.

At that point of time, I was thinking along the lines of macro economics, like aging population, economic issues and their low reproduction rates (despite having an insane amount of porn in their media).But little did I knew, that the statement that I had made would had turned so true so soon. Things are now going downhill with such ferocity for Japan, that it is totally unreal.

On 11th March 2011, the forces of nature shook Japan with a massive 8.8-9.0 earthquake (depending on who you listens to), ravaged her with towering tsunamis, and then end the insult with an upcoming nuclear disaster involving 6 reactors.

The chains of events that had unfolded so far pretty much set what I had said to my sister in concrete. The Japan that she had visited will never be the same again. Probably by tomorrow, nuclear fallout would be spreading from the doomed power plant. That will send Japan into the Great Depression v2.0 faster than I thought, and with certainty.

By the way, you can kiss goodbye to the Japan holiday idea for a decade or so if the nuclear plant starts releasing nuclear fallout as prophesied.

Great depression V2.0

It has been years after I started to explore the financial markets, looking for a greener pasture instead if climbing the boring corporate ladder. Forex trading is still my main focus but I couldn't tame the beast just yet.

As each financial market is entwined with another, I eventually dug more into macro economics. While doing some research on macro economics and through the studying of the 2008 collapse of the sub-prime market which triggered a chain of crazy bubbles explosions, I learn that things are not well now. I can go on and on but let's summaries this quickly.

The worst is yet to come. The rampant debasement of the fiat currency which is the world reserve currency call the US dollar is on the verge of pushing the world into the next Great depression and maybe even WWIII.

It's a doom and gloom story here is my prediction for 2011 and beyond.
1) The official inflation rate 2011 estimate of 2-4% will be a joke. It will beyond 5%. Everything will increase in price.
2) Most currency will fall in value in relation to gold and silver.
3) There will be more wars, civil wars, border disputes, unrest, protest, and basically lots of angry people all over the world.
4) Watch your petrol price. It is going to soar.

So what to do?
1)Dump US dollar, anything that is denominated in USD$ is going to look really sad.
2)Buy gold and silver. Not the jewelery type but ETF, 99% bullion, 99% coins, UOB silver & gold saving accounts.

Prices of gold and silver are going through the roof. Grabs yours today.


3) Hang on to your government job if you have one.


Things are not so rosy this year.