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Holding Gold is like holding a wildcard

The future of money is uncertain, and speculation about what comes next is all over the place. The Federal Reserve note "dollar" is the world's reserve currency, but its seat on that throne is no longer secure.

Nations around the world aren't happy with either the weaponization of the dollar or the fact that the U.S. government prints it without restraint.

The BRICS countries are actively developing an asset-backed currency to compete with the dollar.

They are already cutting trade deals with settlement in rubles or yuan, instead of the greenback.

Central banks everywhere, including the Federal Reserve, are toying with digital currencies.

Authoritarians love the idea of money they can programmatically track and control. If it were up to them, CBDCs would almost certainly become the coin of the realm in countries around the world.

Fortunately, it may not be up to them. The number of people sounding the alarm is growing and it is hard to corral free people and free markets.

Some people expect the launch of the quantum financial system – a radical overhaul of banking, money and finance powered by quantum computing.

Others expect a decentralized cryptocurrency like Bitcoin to win out.

The point here is not to speculate about what monetary system will prevail in the decades ahead. Suffice it to say there are lots of competing interests and ideas, so there is no telling which might succeed.

It simply looks increasingly certain that major changes are coming and may not be too far off.

The best way for investors to prepare for the coming changes probably isn't to bet on a single outcome. There are smart people making the case for each of the scenarios mentioned above. Most will be wrong, by default.

It is even possible they will all be wrong as some unexpected development changes the course of monetary history. Perhaps the U.S. government will finally do the right thing. Congress could restore restraints on borrowing and spending and abandon the fiat dollar – backing it once again with gold.

Investors don't have to guess. Holding tangible assets with universal value and appeal is a better way to prepare against the coming changes. There will be a market and a price for commodities, real estate, and precious metals regardless of what money people might use.

Investors can know this because it is already proven. It doesn't matter whether you have euros, rubles, or pounds, there is a price for tangible assets like gold. And this has been true throughout history.

Precious metals offer additional advantages over other tangible assets in that it is easy to physically store significant value, ownership can remain private, and they are portable.

These traits make gold and silver the best wildcard to hold with so much uncertainty ahead.


To receive free commentary and analysis on the gold and silver markets, click here to be added to the Money Metals news service.

Author

Clint Siegner

Clint Siegner

Money Metals Exchange

Clint Siegner is a Director at Money Metals Exchange, the national precious metals company named 2015 "Dealer of the Year" in the United States by an independent global ratings group.

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