As I was watching an interview with Mark Mobius, Chairman of Templeton Investments and one of the wisest investors, one comment stood out to me. Mr Mobius stated that global central banks have printed over 10 trillion dollars in the last 10 years. The chart below shows that the 4 majors have acquired almost $5 trillion by themselves since the global finance crisis started in 2007. According to the chart, as of the 2nd quarter of this year, the 4 major central banks in the West held a balance sheet equivalent to 24% of their respective economies.
Chart 1: Central banks have printed almost $5 trillion since 2007
Source: McKinsey Research
Chart 2: Gold's performance in 2013 is the worst since 1981
Source: Short Side of Long
But I urge all readers to make sure they own some Gold and continue to buy it at low prices, because central banks' money printing exercise will eventually come home to roost. I expect Gold to make a new high above $2,000 per ounce and surprise all investors (including me) with the heights it eventually reaches.