The Money, Honey: Investments as Good as Gold
I recently read a book called “Aftershock: Protect Yourself and Profit in the Next Global Financial Meltdown” by brothers David and Robert Wiedemer, in which we the readers are given a rundown of what is going to happen in the next few years in our economy in the United States and around the world. It is not a pretty picture, I warn you, and as you read, you can feel your stomach turning to mush, as mine did.
One of the reasons you become more and more nervous and frightened as you read this kind of book is that you begin to realize that there is absolutely nothing you can do about the situation the author(s) are describing. In “Aftershock,” for example, they talk about the global economic slowdown, the failure of banks worldwide, the housing market downturn, the mortgage failures which create a real estate collapse of epic proportions not seen before and which will never be seen again because we will never recover from it, the national debt of our government becoming so unbearable that eventually there will be a total collapse.
In the face of such horrendous events, what is the individual investor like you and me to do? That’s what you keep asking. At least that’s what I kept asking as I read further and further into the book. If, as the authors kept saying, stocks and bonds were going to totally collapse, which was understandable given the scenario they were painting, if real estate was going to be like throwing your money down a black hole, where then could you hope to invest that might give you some safety, some assurance that every dollar you were putting away might at least be worth $1.02 in a year or so? It wasn’t asking much, was it, since you had paid a goodly amount of money most likely for the book in the hopes that it would help you financially to make your future more secure.
Finally… finally, toward the end of the book, they offered a rather limp suggestion: gold. Gold always seems to be where die-hard economic fatalists take us when they cry, “the sky is falling in” about any other aspect of the worldwide economic scene. They can usually give you a few substantial reasons as to why gold will hold up when everything else is failing, and they don’t much care what that gold investment looks like: mutual funds, ETFs, gold bullion, mining stocks, coins, whatever. Just buy gold in some form and hold onto it for the coming world cataclysm.
So if you’re worried that the world is coming to an economic end, you might want to save the cost of this book and follow the advice of the authors that I’m abbreviating for you here: buy some form of gold. It probably can’t hurt, and it somehow always feels good to own gold, in the same way it feels good to own diamonds, especially if it’s in the form of a ring on your finger or earrings in your ears.
My theory, however, is that if the world economy is going to get as bad as these fellows and others indicate, there’s really not going to be much in the way of salvation for any of us. On the other hand, maybe their shocking titles and pronouncements are merely devices that sell books better. Do you think?
As for me, I’m going to continue on a sensible investing course, assuming that the world is not going to end in the near future, because if it is ending, none of this will probably matter anyway.