The world economy has gone through a lot of crises, which made it possible to collect a certain statistical base. That is, we can predict how certain financial instruments will behave during periods of economic growth or recession.
Unfortunately, past data always have an error when trying to superimpose them on the future picture of the world, because what was and what will be are different situations.
For example: look at how long it has been for the fall in gold since 1979 ($ 681). The price fully recovered only in 2007, on the eve of the next crisis. The fall of 2008 was recouped in 1 year, and the fall in 2012 — in almost 8 years.
And here’s what happened to gold in the March collapse of this year:
I have written quite a few articles about #gold and different ways of buying it, and recently I often mention it when describing my investment portfolio and in the context of the current situation.
And some people have pointed out in the comments that:
I do not presume that this will be so, since the world is for the first time in such a situation. The differences from previous crises (in my opinion), from political relations to technology, are obvious.
The world is no longer what it was in 79th, 2008 and 2014.
But, like commentators, I am inclined to this alignment. Indeed, if the market collapses once again and we see a second bottom (and this is exactly what I expect to increase the number of assets), then gold will fall along with most other assets.
And yet there is a caveat: commentators overlook the fact that
Therefore, I do not mention gold in the context of the second bottom and the collapse of the markets, but in the framework of the unfolding crisis and the policy pursued by the Fed and the Central Bank.
The pandemic and quarantines have reduced consumption and created pent-up demand (when consumption decreases and then rises rapidly). At the same time, the Fed printed more than $ 4 trillion, the Central Bank, according to various sources, about $ 3 trillion.
Against this background, the only reason why inflation has not yet increased is the cash flow that went to the market (stocks and bonds, as well as gold and #bitcoin).
And the risk that inflation will start to accelerate has grown.
Therefore, the format questions «
It would be more correct to ask: «
Again, I recently said that almost all the stocks in my portfolio went into correction and show a minus. But gold, which was bought in the portfolio in the first place and showed growth, compensates for this loss and evens out the portfolio’s profitability.
Therefore, if there is a second collapse, I will buy gold on a par with the shares of the companies. And I will not sell until I understand that the economy has really returned to order and further growth awaits us.
Hence another interesting conclusion: gold is not the best investment instrument during periods of economic growth and recovery.
And a thought to think about (returning to the price chart):