G20 and gold

Posted | 17/11/2014 / Views | 2751
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So the last of the world leaders has left Brisbane and all are hailing it a great success.  There are 2 things that standout for investors of gold to note.  One, is there was agreement on ‘bail in’ failed bank treatment by all.  This means that should a bank fail (ala Lehmans and others since) it will be the bank and its creditors that will wear it not the tax payer (ala Lehmans and others since).  We remind you, you as a depositor in a bank are an unsecured creditor.  The money is not yours if the bank goes broke.  The Government Deposit Guarantee only covers $20b per bank.  Cash in the form of gold and silver avoids this risk.  Secondly, leaders agreed to a 2% growth target.  Whilst many in Europe are closer to zero right now and others fragile at best, the risk is this is achieved through further stimulus accumulating further debt.  Government’s can only ‘decide’ on growth in an organic market by such means.  As David Stockman, White House budget director under President Reagan told Fox Business News last week… "Each and every day the central banks in the world get more out of control fuelling a bubble the likes of which we have never seen in modern times, if ever,".  This all just reinforces hedging your wealth in gold and silver.