United States National Debt Clock

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 World’s largest and most expensive diamonds

Art, Antiques, Gold, Silver as well as Fine Gems enjoy a world marketplace. Why Tangibles/Hard Assets are considered diversification? Tangible assets are not currency or country specific assets and do not "ZERO" in value like a paper asset can. Remember Enron, General Motors, Lehman Brothers and Japan Airlines just to name a few. Investors in those so called blue chip conglomerates lost it all.  

 

 
 

Hard Assets vs. Paper Investments


Any of the mentioned hard assets can be bought and sold globally and in reality become global currency. They are immune to government intervention since they are portable and for the most part transactions in these assets do not need to be reported directly to any Government. They afford total privacy.

At Hard Assets we believe while structuring an investment portfolio, received wisdom declares it prudent to diversify. In a diversified portfolio, by definition, the various categories will out-perform or under-perform depending on the market environment. So, a diversified portfolio never truly maximizes on any given market; its structure is designed to perform modestly well in nearly all circumstances. Keeping 10-15% of total holdings in hard, transportable assets seems like a reasonable hedge against a stock market correction or--in a different reality-- an overheating inflationary boom.

Inflationary concerns are one reason price have risen on hard assets. The other is the collapse of the global financial markets. Fear is a great motivator when confronted with global financial market instability

When an economy needs to be stimulated because it's running sluggish or the government needs to pay off more of its debts, it cranks the printing presses to make more money.

In the past you may recall that the American dollar was tied to the value precious metals (such as, gold or silver). You may remember when the United States among other countries were on the gold standard. At that time each dollar or pound sterling was backed by an asset. You could literally take paper money and exchange it for its value in gold or silver at your local bank.

 
 
 
 

Inflation vs. Market Crunch

 

Today, there is no limit as to how many dollars are in circulation regardless of the country you live in and the currency you are paid with. The government can print any amount of money it wants. When there is twice the amount of money for the same goods to be purchased, the goods now will cost twice as much because there is double the amount of money to buy them. This is one cause of inflation. The way to beat inflation is to acquire goods before the masses discover its trickled down effect. Then sell the goods just before inflation has peaked. Can you recall when silver starting out at about $1 per ounce in early 1970's and then rose to $50 an ounce by the end of 1979? How about when gold rose from $32 an ounce to $800 per ounce? After 1980 the feds tightened the money supply and silver dropped down to about $3.50 an ounce and gold dropped below $300 an ounce. The Cycle is repeating itself. World Governments are doing the same as they did in the 1980’s. They are increasing debt, cranking the printing presses to make more money and history is repeating itself. Gold and Silver  has more than doubled in the last 5 years and other hard assets such as precious gems like colored diamonds have more than tripled in price over the same period.

 

Diversification is the key. “Don't Put All Your Eggs in One Basket”

 

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