To the surprise of many, Gold has been the best performing asset class since 2000. ??? True It’s hard for many to believe that a one ounce Gold Coin sitting in your safety deposit box could increase in value from….. to … todsy. In “The Case for Gold” we’ll explain why you should not think of Gold as a “trade” or a “get rich quick” or something you own just when everybody is talking about it.
We have written about Gold, Silver, and precious metals since 1985. Our focus as been on using Gold as inter-generational wealth investment.
Wealth preservation and privacy are a primary strategy for owning hard assets vs stocks and bonds.
History has proven that every government paper currency ever printed has become worthless given enough time. The destruction of a nation’s currency is always intentional and results in a loss of buying power. We don’t always call this “inflation,” but it is the destructive process of inflating the money supply do more money is chasing a fixed supply of goods and services.
We believe that Gold, Silver, and other forms of precious metals serve as an alternative form of preserving and growing wealth. We prefer not to think of them as “speculative” investments despite the volatility we’ve seen in the 21st century. Gold, in particular, has always served to preserve long-term buying power.
Despite the long history of Silver being money—day in, day out, hand-to-hand money for a thousand ? years—Silver was pulled out of circulating coins in 1964. The reason: inflation. Silver money became too valuable and millions of Silver coins were melted down. Any United States dime, quarter, half dollar or dollar that is dated 1964 or earlier is made of 90% silver. Regardless of their worn condition or date they are worth no less than their weight in Silver .7734 Troy ounces. A Silver Dollar was worth its face value of $1.00 when minted, Today, it .7734 x the price of Silver. At this writing, .7734 x $27.50 = $21.21 melt value. If you had saved a U.S. paper dollar in 1964, it would still only have $1.00 of buying power.
Gold has stability in buying power. Our example shows that Silver does also. Silver has been far volatile and, in our opinion, is the metal “to bet on” today. as the Silver Price has plenty of room to run from today’s $xx price in September 2020 before it comes close to the xxx high or the year high of xx.
Over Time Gold Acts as Portfolio Insurance
You should add Gold to your portfolio for stability when there’s uncertainty, fear, panic, and social unrest.
You’ll find rising Gold Prices are the inverse of a falling Dollar.
Gold savings are the opposite of debt.
The Impact of Covid19 on Gold
Gold has always served to preserve buying power. This is not true of the U.S. Dollar. A Dollar depends on the confidence of the nation’s of the world to trust our leaders to sustain its value.
The Federal Reserve has injected x Trillion Dollars into the economic system, money created out of thin air. The great unknown is the impact this sudden “crisis money creation experiment” will have on Stocks, Bonds, Real Estate, the U.S. Dollar, and our trading partners. The U.S. stimulus program is designed to replace the missing GDP in the Covid shutdowns, millions unemployed suddenly, and the ensuing contractionMom the world economy.
Gold is not only “crisis money” but is always “the last currency standing.” In today’s rush by central bankers to flood the world with paper money during the Covid19 pandemic, it’s overlooked that Gold will rise in value against every major currency. As a result, more investors will discover Gold’s rising value in their country. This will further add to the demand pressure.
Long-Term Financial Destruction from the Pandemic
Gold’s resiliency (and rising value) during the pandemic is not a short-term impact, in our opinion. Neither is Athens impact of Covid 19 short-term. We believe it will take at least into 2022 to stabilize the economy and have any hope of a growing GDP.
This pandemic’s impact goes far beyond deaths and sickness alone. Our decision to shut-down businesses, schools, sports, and even churches has created
America may crash into an unrecoverable debt spiral from x to an estimated xxx by years end. This would add up more than xxx of national debt for every man, woman, and child in America.
As corporate incomes and profits shrink, their Stock prices will eventually shrink accordingly.
Another sudden panic sell-off in Stocks could be worse than the 2000 Dot Com Crash or the near total meltdown of the financial system 2008. Risks are high, rewards may be limited in holding Stocks.
We live in a fragile world in uncertain times. Even prior to the Covid19 crisis, America’s Socio-economic foundation was being questioned. The political chaos in Washington undermines our confidence in a government. The pandemic has shown us the inability of government to save us or save itself.
The ever-growing debt problem at National, state, and city, state has grown to unsustainable levels as tax revenues have fallen drastically. Millions of Americans are not working, can’t pay on college loans, the car note or the mortgage or rent. Unemployed people pay no income tax. Profits from small to large businesses are shrinking and 5hey will contribute far less this next year to government taxes.
Locally, a drastic reduction in tourists, travel, and retail spending denies local and state income from sales taxes. People sitting at home are building their savings not supporting our ?? economy.
Entire sectors of our economy are in survival mode. Airlines, cruises, hotels, concerts, entertainment, college sports, professional sports, restaurant, energy, car dealers, retail malls, advertising, non-profits, and even churches are struggling to avoid bankruptcy or pay the bills.
We will not talk politics other than to say— half the National will be unhappy and angry after Election Day. Fear, disappointment, uncertainty, and crap are always bad for Stock Markets and are almost guaranteed to create further demand on Gold, Silver, and hard assets.
We feel our Case For Gold should conclude with the old saying— “All things must pass.” Despite there being a ripe opportunity short-term to profit from rising metal’s prices, a balanced and diversified portfolio has never been more important. Review you finances often. Don’t take recent rising Stock prices for granted. Protect and defend your wealth. Don’t overlook the ability of Gold to protect and grow your family’s wealth.