11:49 AM Looking at Gold (and Silver) from the Third Side of the Coin | |
Two years ago at a conference during which I both presented and attended, a Keynote speaker, "Rich Dad" Robert Kiyosaki, introduced me to a different way of looking at things. He posed the question, "How many sides does a coin have?" The correct answer is "three." The front (obverse), back (reverse) and… the edge! When you think about it, this makes sense. From this angle – uncommon to most observers – a person can begin to look more deeply at a given subject. From the edge, you are able by definition, to see "both sides" of the story. Using Rich Dad's perspective as a research tool helps define and validate the premise of this essay… that the price action right now of gold – and soon silver – are giving us important clues about the direction, strength, and durability of the next price trend. It's easy and understandable for Norteamericanos to become fixated on the price of gold and silver, expressed in their domestic currency, the U.S. dollar. But once in a while, it's important to take a step back and gauge how much people in OTHER countries are paying in their currency when they exchange fiat for some of the honest money that gold and silver have historically represented. When gold is in an uptrend against other currencies it lets you know that something is going on under the hood that most people are missing. When precious metals' buying in these countries continues to increase in spite of the fact that it has become even more expensive to do so, Mr. Market is letting you in on just one more reason why you should pay attention... and either start "stacking" or add to your current insurance/investment position. The Trend is Your FriendIncreased gold purchases by "Silk Road" countries – for going on two decades – have continued unabated in spite of periodic currency devaluations and loss of purchasing power to the U.S. dollar. Not to mention that China, which used to export millions of ounces of silver annually, has for some years, not only been keeping all of its internal production, but importing more! The Shanghai Gold Exchange (SGE) chart demonstrates that this trend shows no signs of letting up.
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