David Quintieri, author of The Money GPS, and the GoldMoney Foundation’s Alasdair Macleod talk about the state of the economy and how to make money in this environment by using the four asset classes: paper assets, commodities/precious metals, real estate and businesses.
Quintieri states that governments have put themselves in a tight spot in which money printing is their only option. They discuss how low interest rates lead to market distortions, boom and bust cycles and the destruction of savings. The Money GPS was written to help people navigate this environment and empower them in terms of personal finance.
In his view, market volatility will persist. If asset prices start falling again, he thinks that the Fed will step in with another round of QE. Quintieri believes that gold and silver should be held for the foreseeable future, as they have a good performance record during periods of crises. He points out the benefit of owning physical metal, as opposed to “paper gold” products. Mining investments should be diversified, so as to spread risk.
Quintieri sees the staggering amount of derivatives — $1.5 quadrillion outstanding in 2011 according to the Bank for International Settlements — as the biggest risk facing the global economy. This mammoth sum compares with total world GDP of “just” $63 trillion.
This video podcast was recorded on April 22 2012.