A shine of certainty in an uncertain world
November 9, 2020
In a season of political and economic uncertainty, it’s understandable for people to feel unsure about what may lie ahead. Even the official winner of the U.S. election will not be certified under U.S. law until at least 8 December, celebratory pronouncements in the news media notwithstanding. So as we endure continued uncertainty on that front it’s useful to take stock of a few of the certainties we can rely on as we think about how to protect and grow our wealth in the coming months and years.
So what do we know for certain about those coming months and years?
- We know for certain that under the policy change announced by The Reserve Bank of Australia last week that someone depositing $10,000 in the bank at the end of one year will now receive an interest payment of $10 instead of the previous $25.
- We know for certain that The Reserve Bank’s publicly stated policy is to further reduce the value of the Australian dollar through their newly created Quantitative Easing (QE) policy. This also applies to other regions and currencies with QE including the U.S. and the Eurozone.
- We know for certain that governments around the world including the U.S. are borrowing unprecedented amounts to battle the economic effects of the COVID lockdowns.
- We know that those extra borrowings (estimated at more than $400 billion so far for Australia alone and more than $5 trillion in the U.S.) manifest as an increased quantity of money against a relatively fixed (or even diminishing) quantity of goods and services.
- We know for certain that such rapid increases in the supply of money can lead to a repricing of goods and services based on the new quantity of money.
- We know that The Reserve Bank last week cited the first evidence of this “repricing” of goods and services when they reported that the official price of food had risen 1.6% in the previous quarter (6.4% annualised).
So it’s understandable for people to feel glum and uncertain! But luckily there is also some very good news on the “certainty” side of the ledger.
- We know for certain that someone who deposited $10,000 into a gold account one year ago will today find the value of that account is more than $12,000.
- We know for certain that prior gold bull markets have seen investors receive triple-digit and even quadruple-digit gains, with the one starting in 1971 returning 2,100% and the one starting in 1999 returning 670%.
- We know for certain that all SendGold customers are the individual outright owners of physical gold bullion, fully segregated from our company assets and from the banking system and protected from confiscation by the property rights enshrined in the Australian Constitution.
- We know for certain that The International Property Rights Alliance has stated that Australian property rights are some of the strongest in the world and that it is absolutely illegal for local, state, or Federal officials to seize someone’s property without due process of law.
Uncertain times can lead people to fear and inaction but we think instead they should be times for people to act to make sure their wealth is protected. Certainly! With SendGold.
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