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Why this indispensable asset has become indispensable for your portfolio

At the beginning of this century, the centenary was worth 3,500 pesos. This year it has reached its historic maximum of 60,000 pesos and will continue to rise.

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Why this indispensable asset has become indispensable for your portfolio
Why this indispensable asset has become indispensable for your portfolio

This story originally appeared on high level

By Guillermo Barba

Gold is an indispensable asset as the foundation of any investment portfolio because it is a solid asset with a persistently unfulfilled demand (which gives it its value) and is indestructibleand it is the only one that is not at the same time a liability someone else.

As long as you are in physical form, it is never zero value financial insurance that never disappears, and even if the rest of your financial portfolio goes down or may go down to zero, the physical gold is there to save it .

Gold is power, and therefore the golden rule of the political and economic world is: Whoever has the gold sets the rules.

Your wallet will be strengthened with physical gold. Without it, it gets weaker.

Not even gold in ETFs (listed funds) or through mining companies is as good as physical, as this way of having the precious metal is another person’s liability.
Therefore, the indestructible foundation of any portfolio must be physical gold, the safest asset, and from there build the “walls, ceilings, and surfaces” with higher-risk assets and (possibly) profit potential. .

Gold prices will continue to rise thanks to the massive supply of liquidity (“printing” digital and paper money with no physical value added) that all central banks around the world are undertaking to “stimulate” the economy after the pandemic. Consistent in all currencies in the world and of course even more in the weakest currencies like the peso and all Latin American currencies.

Your wallet will be strengthened with physical gold. Without him, he becomes weaker / Image: Jacek Dylag via Unsplash

None of this is new, but the climb is stepping up. Let us recall how, at the beginning of this century, the hundredth anniversary of the Mexican pesos was worth around $ 3,500.00.

In 2020, the historic maximum of its centenary has already reached 60,000 pesos and will continue to rise. Why?

Outwardly, because, as I said, all monetary impulses involve creating debt and money out of nothing. Both factors are the perfect fuel for the price of gold, which is the “yardstick” against which the value of all currencies in the world is compared.

Internally because Mexico is doing something wrong. The public deficit may not be noticeable in the numbers, but it is already evident in the lack of medication for cancer patients, in the “Tray Pass” disguised as voluntary quotas for civil servants, in the computers that have been withdrawn from water shortages in public institutions , zero investment in infrastructure beyond the whims of the President of Dos Bocas, the Mayan Train and Santa Lucia; Etc.

Of course, we will continue to comply with public debt servicing. Gradually, however, we are perceived as a country with an increasing risk of default. This risk is actually much higher than expected, considering that Pemex is not already paying its suppliersThe losses are higher than ever and capital continues to be invested in the company.

Throwing “good money against bad money” is a sure formula for an economic catastrophe.
To protect your savings and investments, look for the safe haven for gold. Mostly staying in pesos means trusting that the current government is doing its job well, and it is clear that this is a big mistake..

Editor’s Note: This text is part of our opinion and only reflects the author’s vision, not necessarily the high-level view.

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