Markets have people seeking alternatives

The stock market has suffered big losses recently and is looking a lot like chop suey. On Oct. 26, the share prices of only nine companies listed on the NYSE hit new highs for the year and a whopping 528 hit new lows. The warning was ominous. It has been virtually downhill since.

Gold is doing well and the share prices of at least four startup miners, known as juniors, have had phenomenal increases in the past few years. The two best performing juniors each have share-price increases of more than 1,200 percent. Aside from the juniors, the share prices of the world's largest gold producers have done well in the second half of this year.

Meanwhile, some might question the practicality of placing money in bank accounts earning interest at a meager 1 percent. This has been devastating to senior citizens, and has hurt most everyone else.

Banking is a great business when money is available to lend out at little cost to the bank. The bankers, known as “banksters” by some, have been putting the squeeze on depositors for a long time by paying low deposit rates, yet lending out the money at a substantial mark-up. Hence, in this interest rate environment, it has been easy for a bank to become very profitable.

Gold-related investments and a few others appear to have a higher reward potential than bank deposits. So depositors may soon quicken the pace of withdrawals from their savings accounts in search of alternative investments.

However, perform due diligence before investing in gold and the miners. Regarding alternative investments, beware of the unregulated bitcoin since most investment manias such as this that are not backed by a government or by gold eventually end with a crash. Lewis S. Clark

Middlebury

The writer has a Ph.D. in economics and is a retired bank regulator with primary responsibility of supervising bank examinations for safety and soundness of policies and operations.