QUESTION: You recently said that the wealth of a nation is not its gold. How can you justify that?
ANSWER: Sorry. Gold was a Western thing – not East. China never issued gold coins, so does that mean they should not exist? When war takes places, Britain abandoned the gold standard as did the USA during the Civil War. Under your reasoning, the country should collapse. That proves the point. It is the productive capacity of the people who is the wealth of a nation. There are nations that were rich from gold reserves but their people were still primitive.
This is the same reason gold is not an institutional investment – only retail. Institutions NEED income – and the only way to get income is to lease it out. But then the gold promoters misunderstand that and see it as oppressing gold. They cannot get their mind around other people think differently and have different needs.
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The miners have started 2014 very well indeed on the back of rising gold prices, so the question is; is this the real deal or another head fake? Is the bottom really in? Could there be a final capitulation just ahead of us? Will the summer doldrums take the PMs lower?
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