Why should gold be the product that has this unique property? Perhaps this is because of its history as the first form of money and later as the basis of the gold standard that determines the value of all money. For this reason, gold provides introduction. Create a sense of security as a source of money that always has value, no matter what.
The properties of gold also explain why it is not related to other resources. These include stocks, bonds and oil.
The price of gold does not rise while other resources classify. Stocks and bonds are mutually exclusive because it does not have an inverse relationship.
Reasons to own gold
1. History of retaining its value
Unlike paper money, coins or other assets, gold has maintained its value for centuries. People see gold as a way to pass on and retain their wealth from one generation to the next.
Historically, gold has been an excellent protection against inflation, as its cost continues to rise as the cost of living increases. Over the past 50 years, investors have seen the price of gold rise and the stock market fall in the years of high inflation.
Inflation is a period when prices fall, economic activity slows and the economy is overwhelmed by excess debt and is not seen worldwide. During the Great Depression of the 1930’s, the relative purchasing power of gold increased while other prices fell sharply.
4. Geopolitical fears / causes
Gold retains its value not only in times of financial uncertainty but also in times of geopolitical uncertainty. It is also often referred to as a “crisis product” because people are fleeing for their relative safety as global tensions escalate. At this point, gold outperforms any other investment.
History of gold and coins
All world currencies are backed up by precious metals. One of them is that gold is playing a major role in supporting the value of all the world’s currencies. The bottom line is that gold is money and currencies are paper that can raise the priceless because governments have the power to determine the value of any country’s currency.
The future of currency We are at the tipping point
Why are smart investors investing in gold?
1. The market is now much more volatile after the Brexit and Trump elections. Ignoring all odds, the United States has chosen Donald Trump as its new president and no one can predict what will happen in the next four years. As commander-in-chief, Trump now has the power to declare nuclear war and no one can legally stop him. Britain has left the EU and other European countries want to do the same. Wherever you are in the Western world, uncertainty is in the air like never before.
2. The United States government is monitoring retirement provisions. In 2010, Portugal confiscated assets from retirement accounts to meet public deficits and debts. Ireland and France did the same thing in 2011 as Poland did in 2013. The US government. He observed. Since 2011, the finance ministry has borrowed four times as much from the government employees’ pension fund to cover the budget deficit. Many billionaire investors believe the legend of Jim Rogers that personal accounts will continue to be a government attack.
3. Top 5 US banks are now bigger than before the crisis. They have heard about the five largest banks in the United States and their systemic importance as the current financial crisis threatens to break them. Lawmakers and regulators have promised to address the issue as soon as the crisis is under control. More than five years after the end of the crisis, the five largest banks are more important and critical to the system than before the crisis. The government has exacerbated the problem by forcing so-called “large banks to fail” to exploit violations. If any of these sponsors fail now, it will be absolutely catastrophic.
4. The dangers of derivatives now threaten banks more than they did in 2007/2008. As promised by regulators, the derivatives that destroyed banks in 2008 have not disappeared. Today, the derivative exposure of the five largest U.S. banks is 45% higher than before the 2008 economic collapse. The estimated bubble surpassed $ 273 billion, up from $ 187 billion in 2008.
5. US interest rates are already at unusual levels, with the Fed having little room to cut interest rates. Even after the annual interest rate rises, the basic interest rate remains between 7 and 8 percent. Note that before the crisis began in August 2007, the interest rate on federal funds was 5.25%. In the next crisis, the Fed will have less than half a percentage point, which could lower interest rates to boost the economy.
6. US banks are not the safest place for your money Global Finance Magazine publishes an annual list of the 50 safest banks in the world. Only 5 of them are located in the United States. UU is just # 39 of the first position in a US bank order.
7. The Fed’s overall balance sheet deficit continues to grow compared to the 2008 financial crisis: The US Federal Reserve’s 2008 financial crisis still includes about 8 1.8 trillion worth of mortgage-backed securities, more than double the 1 trillion. I had before the crisis started. As mortgage-backed securities deteriorate again, the Federal Reserve has a much lower chance of exploiting bad assets than ever before.
8. The FDIC acknowledges that it has no reserves to cover another banking crisis. The FDIC’s most recent annual report shows that they will not have sufficient reserves to insure enough bank deposits in the country for at least another five years. This amazing revelation acknowledges that they can cover only 1.01% of bank deposits in the United States, or their bank deposits ranging from $ 1 to $ 100.
9. Long-term unemployment is higher than before the Great Recession. The unemployment rate was 4.4% in early 2007 before the last crisis began. Finally, when the unemployment rate reached 4.7% as the financial crisis began to devastate the U.S. economy, long-term unemployment remained high and declined significantly five years after the end of labor market participation. The previous crisis. Unemployment could be much higher as a result of the impending crisis.
10. US companies fail at record speed. In early 2016, Gallup CEO Jim Clifton announced that U.S. commercial failures were greater than start-ups starting for the first time in more than three decades. The deficit of medium and small companies has a big impact on an economy that has long been driven by the private sector. Big companies are not immune. Even heavyweights in the U.S. economy, such as Microsoft (which cut 18,000 jobs) and McDonald’s (which closed 700 stores a year) are experiencing this terrible trend.
Why do smart investors add physical gold to their retirement accounts?
Ensuring inflation and inflation.
Limited delivery increases demand
A safe haven in times of geopolitical, economic and financial instability.
Diversity and portfolio protection.
Cover against the collapse of the dollar and money printing policy.