The problem with tip sheets is that they usually come out once a week or once a month and the writers are faced with the need to say something irrespective of whether there is anything worth saying by the time the writer is faced with a blank sheet of paper and a deadline.
The same is true when it comes to blogs. It is time again for the next blog from the Algarve, but what is happening this week?
The trouble is, this week is pretty much like the last few weeks. The disaster in the West continues. Fiat currencies are continuing to collapse. Gold is hovering around its highs, so is bitcoin. The dollar is still collapsing.
Real estate is suffering from a severe case of indigestion, and the western stock markets are not exactly poised to power ahead.
All the above means that the honest writer has to admit that nothing has really changed since last week. We dont have the crash we are all waiting for, and we dont have any obvious buy signals. In fact the only buy I would contemplate would be the purchase of bitcoin via the method I mentioned in a previous blog post. I mean the purchase through a mortgage to lock in the current price. I hope you at least looked into that idea. I think we are ready for an upward burst in that market.
My own investments are mostly on hold at the moment. If I can find safe and productive places to put spare cash for the investment returns I will park money temporarily and collect the interest.
At the moment the best safe return I can find pays out 16% p.a. and is invested in gold.
My ideal return is 10%+ p.a. That means net. In other words I subtract currency depreciation (which is usually claimed to be inflation, but which is usually government induced currency debasement), and see what the real appreciation of my funds is.
Let’s do some simple maths to find out what that is. I will do a calculation in sterling, and another in dollars. And I will then set that against a proper baseline, namely the value of gold.
Just to be clear about real annual depreciation let’s set that 16% return against the gold price. Over the past year gold has risen in terms of sterling by a fraction over 34%. That means my current investment, though based upon refining gold to its investment grade is not keeping up with its fully refined value. In the short term my new investment is underperforming, and not by a small amount either. I would have done considerably better holding pure gold.
Gold price yearly low: £1,993.56; Yearly high: £3,013.30. An increase of roughly 34%.
Sterling government adjusted inflation: 3.8%
US adjusted inflation rate: 2.9%
The dollar has declined by approximately 11% this year. Here’s the chart
Conclusion
The conclusion from this simple piece of maths shows that I should have been invested in physical gold this year, but that in order to garner a 10% return on my assets I could have been invested in gold related investments, or bitcoin.
Bitcoin is up 20% over the course of the past year, so that’s done well; comfortably within my acceptable range.
If I was based in the US things would look pretty grim. The downsides are inflation (3%), and dollar slide 11%. Total 14%. That is a massive chunk immediately subtracted from my 16% payout. In other words I would be ahead by only 2% for the year. That is a pathetically low return.
My thoughts going forward suggest I stay invested where I am, but I am waiting for a stock market collapse, and maybe a real estate collapse. If or when such collapses occur I shall be looking for bargains.
If you’re based in the USA you would not be doing well at all. I think the best investment advice I could give would be to move.
MAGA sounds a great idea, but as of today it isn’t working. And set against the price of gold, neither is Europe.
The maths dont lie. The West is in trouble.