In the current environment of rising inflation and easy monetary policies, the value of gold could potentially go sharply higher from recent levels.
Unlike many traders out there, the successful gold investor has learned to “see the forest through the trees.”
Put simply, gold investors understand that the shiny yellow metal is not likely to go straight up in price. It can, however, be expected to trend higher and over time, moving well beyond all-time highs.
Modern investors, who have grown accustomed to the free-for-all that is the stock market, often find themselves asking why they ought to buy and hold gold. The savvy investor, on the other hand, understands that you cannot afford not to own gold bullion.
Below are three highlighted reasons to buy and hold physical gold. Ignore them at your peril!
Inflation Is Surging
The threat of rising price pressures has been the topic of financial news media for several weeks now.
The price of everyday goods and services has without question shown a sharp rise in recent months.
As the prices of goods and services are on the rise, the Federal Reserve and other global central banks have voiced their intent to keep their feet on the monetary gas pedal, maintaining rates at or near zero while also continuing to purchase bonds in QE programs.
As the Fed maintains its status quo, the value of the dollar is likely to decline further, perhaps much further. Recent declines may only be the tip of the iceberg.
Gold Is More Than a Promise
In the modern world of fiat currencies, nations no longer back their paper money by anything more than a promise.
The United States, for example, does not back the Federal Reserve Note “dollar” by anything except its good faith and credit since the nation was taken off the gold/dollar peg.
This makes every dollar nothing more than a promise to pay.
As the confidence in these promises decline, so does the amount of goods and services they can buy.
As it takes more dollars to buy goods and services – think everyday items such as milk, bread, gasoline, or electrical service – the real disposable income of dollar [bag]holders declines as well.
The effects of price inflation are readily felt in the economy.
Having to cough up more to cover the essential bases, people are far less likely to purchase items such as vacations, new cars, and other such products, preferring to focus on the staples. This can drastically slow economic activity and even put the economy into a full-blown recession.
As the country continues to borrow, borrow, borrow and spend, spend, spend, NOW is the time to take action to protect yourself from what could be coming down the road.
Gold Is Traded and Valued All Over the World
There is perhaps no other asset class that is as valued and recognized the world over as physical gold. This makes gold, many would argue, the only true form of money left on the planet.
Paper money has shown time and time again that it tends to fail with the passage of time, and the U.S. dollar should be no different. The current downtrend in our fiat currency would seemingly point to an eventual worthless status.
Gold is a physical asset that can be felt and put into your hand. The value of a gold bullion coin is derived almost entirely from its intrinsic metal content rather than a promise to pay or other features.
When you buy gold bullion, you know what you are getting and what it is valued at. You know that gold can be exchanged or traded anywhere in the world for other assets, paper money, or tangible goods. Gold is also a highly liquid market, making it simple and convenient to sell your gold at any time to dealers or other investors.
As the United States and other developed countries enter what could be a very dangerous financial period, now is the time to think about your future and to protect your wealth.
Given its long history as a reliable store of value and protector of wealth, there is no better asset class to turn to than physical gold.
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