Wall of Worry Extends from the USA to Europe

In the wake of yesterday’s serial downgrading of the world’s biggest banks, it is clear that the world economy and financial markets are entering a dangerous period for which investors must seek the protection and security of gold.

But we might add this morning that there are other items in the news that investors need to pay attention to. And these additional news items extend around the globe as well.

Starting right here in the USA, we have a news article about the bleak real estate market, which remains in a depression. (Yes, a depression.) We have been hearing from some real estate pundits for some time now that the real estate market is going to make a comeback. So far, there is no sign of it. In fact, as the article below mentions, the housing market just hit a fresh 15-year low. It seems to us that before the market can recover it must stop falling first.

http://blogs.smartmoney.com/advice/2012/06/21/5-housing-markets-where-renting-beats-owning/

There was a time when real estate was considered a suitable alternative investment for investors seeking diversification from stocks, bonds and cash. That just isn’t so any more. Real estate not only fell right along with the stock market back in the 2008 financial crisis, but it played a role in causing the bear market in stocks.

Investors seeking alternative assets need to look to true independent markets, such as rare coins and precious metals, which have historically had a low or even negative correlation with stocks.

Switching to conditions across the Atlantic Ocean, we have two news items which, while not pleasant, are issues that investors in the US ignore at their peril. Readers may recall that the markets breathed a sigh of relief at the results of the Greek elections last weekend. Greece often seems at the edge of the abyss, but also always seems to pull back at the last moment. Nevertheless, Greece is in anything but good condition. How bad are things in Greece?

Thousands of Greeks are lining up for food handouts in a scene reminiscent of the Great Depression:

http://www.dailymail.co.uk/news/article-2161651/Starving-Greeks-food-thousands-politicians-finally-form-coalition-government–long-last.html

It does very little good for the European Union to bail out the Greek government if the underlying economy in Greece is so bad that the people cannot feed themselves. The situation is not sustainable and is symbolic of the fact that, at the end of the day, no one really knows what to do to solve this building crisis. (Fortunately, there is something that individual investors can do and that’s to own gold. For centuries gold has endured every crisis known to man.)

To elaborate on the European theme, we were all greeted this morning with a stark warning from Italy, the next country in line with a debt crisis problem. Italy’s Prime Minister, Mario Monti says that there is only one week left to save the euro.

http://www.guardian.co.uk/business/2012/jun/22/mario-monti-week-save-eurozone

Every time it seems that policymakers claim that they have gotten their arms around the crisis in Europe, a new near-death experience comes along. Investors should have no confidence at all that there will be a positive outcome from all of this maneuvering. And don’t assume that America is insulated from the fallout. After all, yesterday, the biggest investment banks downgraded by Moody’s were American firms–all because of perceived vulnerability to the outcome of the European crisis.

Prepare ahead of time by accumulating a diversified portfolio of gold investments. Contact Coin Trader today.

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