One Big Mac & Fries... that'll be .001 oz of gold please
Ok, I don't think Mr Clark means this literally in terms of daily purchases, but probably sound advice to think twice about what the actual value of your portfolio is in present value of money.
Start Thinking in Terms of Gold Price
A young woman – let's call her Andrea – inherited some money from her
father in late 1997. She was only nineteen at the time. Not knowing
the first thing about investing, she kept the money in stocks and bonds
as her father had, wanting to hold on to it until she really needed
it. She played it "safe."
She got married last year and so began to withdraw the money. She
was pleased to see a chart from the broker that showed her portfolio
was up about 20%. While admittedly not a great return over 12 years,
her account had nevertheless survived both the 2000 tech crash and the
2008 market meltdown. She knew not all investors could not say the same
thing.
Andrea began spending the money, thankful that she'd saved the money
to start a family. But a cruel reality slowly began to set in: the
money didn't seem to be going very far. She couldn't quite put her
finger on why, but it all clicked when she saw the lofty price of a new
SUV she wanted. She remembered her Dad's favorite vehicle back in the
day – a Ford Ranger pickup – and recalled him boasting that he paid
only $8,500 for it in 1992. A comparable vehicle today costs more than
twice as much.
It hit her like a slap in the face. While the number of dollars in her portfolio was greater than what she inherited, they bought less stuff. It was such a revelation that she actually uttered the words out loud…
"My investments didn’t keep up with inflation… I LOST money!"
Whether they realize it or not, the same thing is happening to most
people's investments. Over time, real returns are diluted because of
inflation. The only reliable way to measure the value of investments is
in terms of a financial intermediary that cannot be inflated: gold.
That way, investors can tell how they're doing in real terms.
...
The answer is simple: save in gold. The dollars you keep in a
money-market account will steadily lose value year after year. In fact,
monies deposited into a simple savings account in 2000 have lost an
incredible 25% of their purchasing power since then. Conversely, if
those savings were denominated in gold, the wealth would have not only
been preserved but increased. We believe this trend will continue – and
accelerate. It will become increasingly important to your financial
future that you cash in earnings from time to time and save them in
precious metals – not in dollars, euros, yen, yuan, or even Swiss
francs.
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