Gold is the right choice – An Interview with Harald Seiz
Harald Seiz, CEO of Karatbars International, has what some would call a vision, or others might call an analysis of the potential development of global financial markets. Not unlike many businessmen, economists and investors around the world, Seiz realizes that the importance of gold rises when the confidence in the economy dwindles.
For him gold is one crucial component for financial independence and social security in the truest sense of the word. He realizes that he is not the first person to have had that revelation, but he has been an unwavering supporter of the precious metal even when it has fallen out of favor with investors and the financial markets. Seiz doesn’t consider the precious metal a passing fad, he sees it as a versatile tool that can be implemented in many ways.
Harald Seiz: Gold is suitable for people who want a versatile and relatively low-risk store of value
We asked Harald Seiz about his outlook on gold in particular and the immediate consequences of the current pandemic on the global economy and financial markets.
Mr. Seiz, why do you think that gold is a good investment in a market destabilized by the Corona virus?
Well, first of all, this commodity is and has been synonymous with value, financial security and predictability for thousands of years. These traits tend to be amplified in times of crisis. One of the aspects that give gold an advantage as a store of value is the negative interest that is currently garnered by people who loan the government money. When the yield of government bonds is positive, you are hit with fees that are called “opportunity costs” for holding gold. Because the state or government sees it as money lost, because you didn’t invest in them. Now, with negative interest probably here to stay for the foreseeable future, the opportunity costs turn into opportunity earnings or profits. That in itself makes it attractive for people looking to strengthen their financial basis.
For which kind of person or investor is gold a suitable store of value?
It is in general a reasonable and by and large low risk commodity and asset. Since the beginning of 2020 the German stock index has risen by about 40%, which is impressive if you consider the dire macro-economic situation we’re in globally because of the pandemic. The problem is that the average price level for stocks was high to begin with. So for one thing, many people just cannot afford to invest in low risk stocks, because they are simply too expensive and on the other hand, buying at these high rates might not be the wisest thing to do, because the profit potential is limited. Gold on the other hand, regardless of its current market value, has one key advantage in comparison with stocks; it actually is a currency. When worse comes to worse, you can pay with gold coins, bullion and so on. You can trade it for products and services. That in itself, for me, makes it incomparable. So to answer your question, gold is suitable for people who want a versatile and relatively low-risk store of value.