Can You Really Afford NOT To Invest In Gold?
Savvy investors turn up the tap on investing in gold when they fear that the value of paper currencies and particularly the US dollar have started to, or are likely to fall drastically. Sounds familiar? Read on…
President Nixon in 1971 gave the go ahead to discard gold and instead resort to rampant printing of the dollar. Prior to that every dollar bill printed was backed up in the US Reserves by its equivalent amount of gold.
Once that changed the paper currency began to lose value. As a result of that decision the U.S. National Debt has soared from 414 billion as it was then to over 17 trillion as it is now - this represents an increase of 3,381%. Staggering eh!
(Note: Compare that to the gold price which has increased 300% since 2002. There is a correlation between the value of the dollar and the price of gold. As the dollar’s value goes down, the value and price of gold goes up).
Prior to 1971 a dollar bill was actually worth a dollar whereas today in reality it is just a piece of paper which is trusted to be worth a dollar. All the time the general public trusts in the banking system that is fine. But the reality is that this trust is wearing thin.
Previously incredulous events like banks failing, countries failing to honour their debts and powerhouses including the United States having their credit rating reduced are now becoming realities.
The policy makers at the time who chose to disengage the US dollar from the gold standard claimed that the dollars being printed were necessary to meet the mammoth expenses incurred for bailouts, wars, special interests and entitlement programs etc. The problem is that they allowed the printing press to run out of control.
Moreover it is already too late to change things now. You may be shocked to know that the current value of the dollar has fallen in real terms to almost 97% of what it once was. It is apprehended that within the next decade it will not even be worth the paper on which it is printed. Almost unthinkable, wouldn’t you agree?
The Implications For Everyone
So should you sweep these facts under the carpet and hope they will go away, or do something now to protect the wealth of you and your family whilst you still can?
Over the past few years the value of the US dollar has declined faster than most other major currencies. This signifies the fact that the buying power of one dollar is now comparatively less than those. Does that give you any incentive to keep your wealth and assets tied to the dollar?
Given these circumstances is it a coincidence that Governments and institutions around the world are now exchanging their dollars for a safer alternative? Is it a coincidence that billionaires and multi-millionaires are doing the same? Is it a coincidence that they all have a common investment policy right now – buying gold!
Should everyday folk be doing the same? Of course! To safeguard your financial interests the best decision that you can take is to invest in gold. Right now is the time. Gold is a rare commodity and its value will only go up over time. It always has. It offers a safe haven in turbulent times.
Is it easy for everyday folk to understand why invest in gold? Sure, Read on… but before you do so you may want to watch the following video in which Mike Maloney, the author of ‘Guide to Investing in Gold and Silver’, explains why within the next 3 to 5 years the gold price could jump to $15,000 per oz :
The global economy has become very uncertain and investors are looking for safe ways to protect their money, their assets and above all their wealth.
Investing in gold is that viable option they are looking for given the current scenario. More and more investors are coming to the conclusion that in order to keep your money safe you should invest at least part of your portfolio in gold. Although over the last few years the economy has been in decline the price of gold has risen dramatically – a three fold increase since 2002 in fact.
Gold Bars or Gold Coins?
To purchase gold you have got two options. You can purchase either gold coins or gold bars. Larger investors including corporations and governments buying gold in bulk usually prefer to buy bars because they can store them efficiently for the long term.
On the other hand smaller gold investors generally prefer to buy gold coins. This is because coins give you the advantage of more convenient storage plus they can be redeemed quickly should the need arise.
Gold Bullion Coins or Rare Gold Coins?
Gold coins that you can choose from when investing or collecting come in the categories of Bullion and Rare.
By definition Bullion is any precious metal that is minted in large supply and for which production is ongoing. Most countries produce their individual gold bullion coins for which they offer guarantees and which become recognised as liquid legal tender. The American Eagle, Canadian Maple Leaf, Chinese Panda, South African Krugerrand, American Buffalo and the Austrian Philharmonic are examples of these.
Rare precious metals are those for which production has been either stopped entirely or severely limited. Typically rare gold is considered remnants of a nation’s gold reserves when its currency was valued by a gold standard. Here are some examples of rare gold bullion coins: British Sovereign, Swiss 20 Franc, French 20 Franc, Saint-Gaudens, Indian Head and Liberty Head.
Nowadays more and more people are adding physical gold and silver to their IRA or 401k, so much so that precious metals IRA’s are quickly becoming the main alternative for pension plans including IRA’s and 401k’s. This can be a very tax efficient way of gold investing.
There is excellent information about precious metals IRA’s and details of the types of bullion and coins that you can hold in them here
Update: I had quite a few people contact me about Gold IRA’s so I’ve now written a lot more about them and explained how I went about setting up my own one. You will find the information here.
Price of Gold
2012 recorded the twelfth year in a row that the price of gold increased. During that time it rose in a jagged line rather than a straight one, but nevertheless the overall trend has been strongly up. 2013 has seen a pull back in the price (‘taking a breather’ as the traders refer to it) and many people are viewing this as buying opportunity.
Historically it has always been the case that when other forms of investment are falling due to economic stability gold typically goes in the other direction and climbs in value.
Don’t be fooled by what the Government might be telling you about the economic crisis being over. The situation in some European counties is still on a knife edge, the Euro is far from stable and the US National Debt is out of control.
By investing in gold you are investing in long term stability. Gold acts as hedge against rising inflation and the declining values of paper currencies. Unlike paper currency which reflects the value of the government and the economy gold is valuable in itself.
Probably the wisest strategy for gold investment is to take a medium to long term view. Some investors trade gold short term on the Futures Markets and make handsome returns but that is probably more because they are skilled traders than because of the commodity they choose to trade. Most forms of investment are subject to short term market fluctuations and precious metals, gold included, are no exception.
Inexperienced traders and investors are better suited to a longer term ‘buy and hold’ strategy for their investment in gold. For that the purchase of physical gold in the forms explained above is perfect.
Anybody can invest in gold. You don’t need to be rich and famous. Nor do you need to be experienced because all you need is a good guide or good point of reference for keeping informed about the gold market.
It is probably easier to invest in gold now than it has ever been because of the internet. This gives you easy access to gold research, gold prices and places where you can buy physical gold
Investing in gold is not a new phenomenon. Since ancient times and until the second half of the 20th century gold has been used by nations to anchor their respective currencies and throughout the ages it has been used by investors to preserve their wealth
Pure gold in its raw form is an extremely valuable asset. It does not rust or corrode over time. It is portable, indestructible and relatively scarce.
Gold and precious metals are one of the most liquid assets in the world. Gold coins can be used as real money and as a form of bartering for goods and services. This cannot be said for other forms of investment such as real estate, bonds and stocks.
In times of economic uncertainty such as those prevalent today gold offers you protection against financial instability and frailties.
These days many financial experts and advisors recommend making physical gold a part of your investment portfolio mainly because of its relationship with other investments such as stocks, shares and bonds which is known as negative correlation. It is generally recommended by financial professionals that you make precious metals between 10 and 30% of your overall portfolio.
Where To Buy Gold
In case you are wondering where to buy physical gold safely and securely, the Company I use and highly recommend is Regal Assets who have a reputation for being one of the most trusted precious metals dealers in America. They are known for their 5 star customer service (which I can vouch for) and they have an A+ rating from the BBB (Better Business Bureau).
When I first came about them I found their representatives really helpful and very knowledgeable about gold. They helped me a lot at the beginning when I didn’t know much at all about how the purchasing process works. What I like is that you can make your purchase from them from the convenience and comfort of your own home.
I have made a video review of Regal Assets which you can watch by clicking here: Regal Assets Video Review
I recommend that you submit your name, email address and ‘phone no. in the form I have placed at the top of this page to request one of Regal Assets’ Gold Investing and Retirement Kits. When I first started researching into investing in physical gold I must have requested more than 20 gold investment kits from various sellers and the one I received from Regal Assets was by far the most informative.
Make sure you submit your phone number in the form then one of the specialists from Regal Assets will give you a call. I found that I learned more from speaking to someone there and asking him a load of questions that from all the other research I had done.
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Filed under: Investment Information