Questions From Readers: Precious Metals & Kiwisaver, BoomBust Cycle, Gold & Silver Exit Strategies

We’ve had a bit of an influx of questions from readers lately. Some we’ve had and answered previously and some not. Here’s a selection of them from this week…

 

Kiwisaver Precious Metals Options?

“Query: Is there an option to move a Kiwisaver investment to Gold and Silver options?”

Are there Kiwisaver funds for gold and silver?

Thanks for your question.

We’re pretty sure there are still not any purely precious metals Kiwisaver funds. When we last looked there certainly weren’t. The best you could find were some with commodities in them and then just a tiny slice of this was gold and silver – but likely not actual physical gold and silver but probably funds, or ETF’s etc.

It will be difficult for anyone to find a precious metals fund in the immediate future too we’d say, as the opinion in this interview is likely reflective the prevailing attitude in the investment community:

Q)  I’m looking for a KiwiSaver scheme that is fully invested in precious metals. Do you know of any funds out there?

At present there are no KiwiSaver funds on the market that invest exclusively in precious metals. Why? Mainly because there would be too much risk associated with them despite gold being regarded as a safe haven in these unstable times. Although there are other single sector funds in KiwiSaver, they are arguably more diversified because they have multiple holdings. They include a New Zealand equities fund, an international equities fund, property funds and cash.

 

Source.

Of course, these other funds are not really diversified since they all contain assets that require the solvency of another party  – i.e. they all have counterparty risk. Unlike gold and silver, the only financial assets that don’t. But we reckon it will be a long time before we see a pure precious metals Kiwisaver fund unfortunately.

 

What’s the Boom-Bust Cycle?

“Thanks for your input in trying to inform and prepare us for the crisis- which I know is coming very soon.

I’m a pretty simple guy that usually can only digest simple information. The way you have presented it is reasonably simple- so far, and I do appreciate it.

When you mention “boom-bust cycle”, is the interpretation of that, saying a certain region or economy has money poured into it resulting in a boom time but it soon comes to a rapid end when the money has run out thus the bust?”

Just one more question, what is your opinion on Jeff Berwick and his Dollar vigilante newsletters, if you are aware of him?”

 

What is the Boom Bust Cycle?

Yes the Boom Bust cycle refers to the impacts of a Central Bank run economy. The attempts to pump credit into an economy to “even out” the business cycle seem to have just the opposite effect, creating larger bubbles and therefore larger busts.

A free market would still have these bubbles and busts – as it is human nature to have a herd mentality and chase assets higher and then also sell in a stampede. However if it weren’t for central intervention it’s likely these busts would be much shorter and sharper and clear the deadwood much faster – so to speak.

Jeff Berwick is an interesting character for sure. We heard him speak and met him in Australia a few years ago. Here is our summary of that presentation:

http://goldsurvivalguide.com/jeff-berwick-the-dollar-vigilante-the-end-of-the-monetary-system-as-we-know-it/

He makes some extreme calls from time to time, but like many he will probably eventually be proven correct. It may just take longer than he and many others (including ourselves!) expect.

Hope that is of some help?

 

If there is a currency crisis and the US dollar collapses taking every other currency with it, how does one take advantage of the high gold/silver prices?

“Hi guys,

Thank you very much for your extremely useful “gold survival guide e-course”. Along with your website I have also been following mike maloney’s hidden secrets of money video series.. Both resources are really fascinating. A question I did have however is what do you foresee will be the exit strategy if gold and silver reach these proposed massive highs during the next financial crash/currency crisis? Mike talks about valuing gold in assets (stock, houses) rather than currency but if there is a currency crisis and the US dollar collapses taking every other currency with it, how does one take advantage of the high gold/silver prices? For example I assume you wouldn’t be able to trade gold/silver directly for assets? Interested in your thoughts.”

Exit strategy for gold and silver
What is the exit strategy for gold and silver?

Thanks for your question. Yes those Mike Maloney videos are very well put together alright.

This is a pretty big question and no one really knows how things will play out. However there are a number of possibilities that we have written about previously. One of them may be just what you have suggested. That you could well swap/trade precious metals for another asset – for example a property or piece of land. You could easily put this in a sale and purchase if the other party was happy to accept precious metals.  But this really all depends on what the monetary system ends up like globally.

Here are few articles on this topic that you might find useful. The first one is a direct answer to your question. The others are all somewhat related too.
Exit Strategies For When the Time Comes to Sell Gold and Silver

 

What Would Happen to the NZ Dollar When the US Dollar Collapses?: Reader Question

 

If/When the US Dollar Collapses, What Will Gold be Priced in?

 

What Good is a Bar of Gold When the Shelves are Empty?

Hopefully that helps. Let us know if you still have any other questions.

 

Got an opinion on any of the above or got a gold, silver or related question you’d like answered? Let us know in the comments below or email us via the contact form here. We don’t give advice but happy to give our personal opinions!

If you’d like to know the exact process for selling gold and silver seeSell Gold & Silver Bullion, Bars or Coins

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