Hopefully you remember the situation in Italy in February and March, the singing from the balconies was wonderful, however the government shutdown and the state of the hospitals was very hard to manage. In an article by Angelo Amante and Christiano Corvino of Reuters, they reported the 8 week shutdown left an economy already on its knees laden with more debt and unemployed people. The European Commission expects the Italian economy to shrink nearly 10%.
In times of trouble, people in general tend to buy gold and in Italy, Mr. Barrotta the manager of 3 Compro One gold shops has seen a 50% increase in purchasing of gold in 2 weeks since the Italian economy opened up. The price of gold is up 25% since December.
Italians are also using pawn shops to keep paying the bills. Pawn shops in Italy near the the Plazza Monte di Pieta have been in operations since the 17th Century.
Linking to dividend paying stocks, gold is a bell weather commodity to buy when you feel the world is going no where, there are various means of buying gold – the physical commodity, coins, gold stocks and certificates. If you buy the commodity, it pays no interest or dividends while you wait. You might be correct and might lose out of other opportunities, in investing only time when tell if you made the right decision.
There are more questions than answers, till the next time – to raising questions.