Capitalism Faces its Biggest Crisis Ever

Capitalism Faces its Biggest Crisis Ever

Many people in the community are now wondering whether capitalism is still a healthy system, or whether it has changed for the worst, and whether capitalism faces its biggest crisis ever.

We are living in a world that can not survive without a constant budget deficit, can not survive without cash printing, can not survive without negative interest rates, there is something extremely rotten. In fact, we are living in a world that accumulates government and public debt, a world that gives us a false sense of fulfillment by spreading around worthless currency. Well, this world is not only rotten but also disgusting! Yes, it stinks of lies, deception as well as ethical decadence.

Capitalism Faces its Biggest Crisis Ever

Why does not anyone stands up to warn the community where we are heading? Well, for the straightforward reason that no politician can tell the truth. Since if they did, they wouldn’t be chosen. The principal function of any politician is to buy or obtain votes and as a result, they can never speak the fact.

Additionally, there are so many beneficial interests with endless rewards. The money men that regulate the monetary system have all to obtain, from developing false markets, false money, and false interest rates.

The Reality Never Dies

The Roman philosopher and also statesman Seneca said: “Veritas Nunquam Perit” (The Truth Never Perishes). That could very well hold however it can be suppressed for a very long time as we are seeing now all over the world.

Let us initially think about the greatest lie which is cash. For 5,000 years, the only genuine cash has been gold (and sometimes silver). Whenever the financial system has differed from that basic principle, by creating false money, it has finished in disaster for the world, whether that has been done with silver coins full of zinc or copper or by just printing paper money.

Complete Disaster of the Currency System to Follow

Which is where we are heading currently. A tragic course of events was triggered when Nixon closed the gold window on August 15th, 1971. Ever since international debt has taken off and also all money has imploded. Financial obligation, derivatives, and unfunded liabilities have gone from workable amounts in 1971 to over $2 quadrillion today. As well as every single money has shed 97-99% in actual terms.

We are currently at the point when we will certainly not be able to change the training course of either of the two. The environment is figured out by really long cycles that humans have no impact on. Now we just have to allow it to take its course which will be devastating for the whole world.

So why is nobody seeing what is taking place and why is nobody taking on the claim that the Emperor is completely naked?

The truth is unpleasant and painful yet it does never die.

It is an indisputable reality that essentially all the fiat cash that is printed by federal governments, central banks as well as commercial banks is pointless as well as for that reason incorrect.


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If a federal government prints cash out of nothing to cover deficit spending, that cash has NO worth given since all the jobs needed to develop it was to push a button on a computer system.

We likewise recognize that the money has no worth because no financial institution or central financial institution is prepared to pay interest in deposit accounts. Instead, because cash is worthless, these bankers desire to be paid to hold the money. There is no reason to pay interest in worthless money.

There is an Abundance of Worthless Money

Capitalism Faces its Biggest Crisis Ever
American Dollars

As well as when a financial institution receives a $1,000 down payment and after that lends out that very same cash 10 times or even more, that cash is likewise worthless, considering that it has set you back $0 to provide the funding.

It is the same with a credit card company, or car funding, they all concern counterfeit money developed by the touch of a switch.

It is this vicious cycle of money printing that has inflated asset bubbles to maximum today. And when it pops, all the air that was inside the bubble just vanishes.

For the ones who don’t recognize what this implies, let me describe it. Allow us to begin with the bubble’s possession. When the worldwide stock, property, and also various other bubble asset markets stand out, all these properties will certainly lose a minimum of 95% of their value in actual terms. The best way to calculate real terms is certainly gold because that is the only cash that has actually survived and also preserved its purchasing power for hundreds of years.

And also, if we take a look at the financial obligation bubble, global financial debt goes to the very least $270 trillion. Yet when the financial obligation bubble stands out, so will other liabilities like the $1.5 quadrillion of derivatives. So when the financial obligation bubble pops, basically all that fiat money ends up being entirely useless. No person can repay it as well as no one wants to acquire it.

Capitalism Faces its Biggest Crisis Ever
Global Debt Chart

I recognize that the above two paragraphs are an extremely streamlined description of what will certainly take place over the coming years. However, this is the ugly truth.

These occasions will undoubtedly not take place in one go. They will certainly most probably begin with the securities market very first collapsing, which will certainly put pressure on credit score markets. A lot more QE will certainly adhere to yet that will just have a short-term impact. Even more collisions, even more, cash printing, the rising cost of living, devaluation, credit report defaults, company closures, and also bank defaults.

We had the first clear signals from numerous significant reserve banks, that something was rotten in the worldwide monetary system already in August, when the Fed, ECB, and BOJ all proclaimed that they would do what it requires to sustain the system.

Quantitative Easing and Money Printing the Same

In September the Fed launched overnight Repos of $75 billion boosts to $100 billion. They additionally took on two-week Repos of $ 30 billion rising to $60 billion. Adhering to that the Fed has now announced that they will certainly start QE of $60 billion each month. We should not call it QE according to the Fed. So allow us just call it money printing since that is what it is.

The President of the Minneapolis Fed stated: “This is not about changing the stance of monetary policy. This is about making sure markets are functioning. This is kind of just a plumbing issue.” He is right, it is a plumbing concern. However, the issue is that the economic system is leaking like a filter without the possibility of connecting all the openings.

Between the end of 2017 and also 2019 the Fed reduced its balance sheet by $700 billion from $4.5 trillion to $3.8 trillion. As always, the Fed has no idea whatsoever. The issue is that the system will not make it through with even more cash printing either.

Central Banks Introduced Unprecedented Economic Stimulus

Capitalism Faces its Biggest Crisis Ever
The FED

The world’s largest central banks had no other option to fight the covid-19 caused crisis than to introduce further economic stimulus amounting to trillions of dollars. It was the Fed and the US government first with the ECB-European commission next, and all the other major western economies and central banks to follow.

Yes, the system is rotten and is currently starting to smell. The activities by the central banks specifically in the last couple of weeks smells of panic. The problem with JP Morgan or Financial Institution of America, the ECB, or possibly the Fed is supporting the bankrupt Deutsche Financial institution? We will most likely quickly learn where the greatest stress is.

On top of the bank issues, the company’s financial debt is obtaining riskier day by day. The financing of firms like We Work and Merlin, are clear indications of just how hazardous this market has ended up being.

Central banks are already trying to deal with the fires, most people are not aware these fires exist. There is a concern whether the central banks will be able to contain these fires or whether they will spread like wildfires.

The Decadence Started in 1971

US financial debt back in 1971 was $400 billion versus $26 trillion today, a “plain” 55x boost. US GDP was $1.2 trillion in 1971 versus $26 trillion today. A 55x boost in US financial debt in the last 48 years has just generated a 17x boost in GDP.

The US economy is in trouble which is not surprising because never-ending money printing of pointless paper money, can not create real growth and wealth whatsoever. Its only effect on the economy is to create the stock market bubble.

It is not just the US that is in this setting. Since taking away the gold support of the dollar in 1971, offered all countries an incentive to print money and increase credit.

The UK Example

I do keep in mind the beginning of the damage of money. Moving later on to the UK, I saw the pound collapsed against the Swiss Franc from CHF 10 in 1972 to Swiss Franc or CHF 1.20 today, an 88% loss of the extra pound.

A period of economic mismanagement and political turmoil in the UK in the 1970s started it all. The annual rising cost of living was 15-17% for 7 years and interest rates got to over 20%.

The economic system was moments from breaking down in 2008 throughout the Great Financial Dilemma. Eleven years later on, worldwide financial debt has doubled and danger has increased greatly.

Central lenders are conscious that the global economic situation is currently standing at a crossroads. The course was laid by them many decades back and now there is no way back.

The US and the Gold Standard

August 2020 remains in many ways comparable to August 1971. America was at that time behind-the-scenes. The country was under pressure after the costly Vietnam battle, as well as the gold standard, which stopped the United States from cheating the system by printing cash. The remainder of the world saw the US’s precarious situation as well as began marketing bucks. To recover their position, Nixon saw no other way than to take the buck off the gold standard, and this was the start of 50 years of global cash printing, and also credit score growth on a humongous scale.

Capitalism Faces its Biggest Crisis Ever
Nixon-Elvis

Nixon’s August 1971 choice has brought about a dilemma of extraordinary proportions. Still, most people can see that we are currently at the point of “a final and also total catastrophe of the currency system included” as von Mises stated.

This August is not one solitary event like in 1971 yet a variety of very clear indicators that all reserve banks are worrying about. Every major reserve bank is currently revealing a level of concern that is extraordinary. They are all telling us that there will certainly be unrestricted money publishing incorporated with no or negative interest rates. This will certainly not clear up half a century of reckless monetary mismanagement.

What Nixon started will now be finished off by current governments as well as main lenders in the most magnificent money printing bonanza, leading to hyperinflation as well as a collapse of the economic system.

Until now, over 40% of worldwide bonds currently generate less than 1% and over $16 trillion well worth of bonds have an unfavorable interest or negative interest.

Negative Interest Policy is Insane

A negative rate of interest prices is of course complete insanity. It will certainly come to be also much more intriguing when home loan rates go to minus 25% so after a few years the financial obligation has been paid by the financial institution!

Us Rates to Decline Unless

Capitalism Faces its Biggest Crisis Ever

95% of international bonds are now listed below the Federal Finances price. Since that rate is 2.5%, this is a short-lived scenario. US rates are likely to decline dramatically throughout the autumn to absolutely nothing unless the devastating results of the neverending money printing start to take place. That will cause a lower dollar and greater gold. US stocks will certainly decrease despite lower prices.

Lower rates are no longer seen by securities market financiers as helpful for markets as a sign of financial difficulty in advance.

Powel Trump and the US-China trade war

Fed Chief Powell simply stated that the “Economy is in a beneficial area”. You ask yourself where that area is, considering that there is nothing good regarding the United States economic climate currently. As well as it appears that Powell doesn’t think his very own words given that in the same breath he claims that there are “substantial threats”.

So the Tit for Tat video game between the US and also China proceeds and what is specific is that everybody is a loser in a trade battle. Trump won’t give in and neither will China. As they play their video games, the global economy will certainly suffer and so will a breakable global economic situation. Global trade is currently down and I am afraid things could get worse in the autumn.

Trump is most likely to win this video game over Powell. Trump has stated that rates need to drop by 1% now. Hence, we are assured to see a lot lower US rates and a rapidly falling buck throughout the fall.

Investors set to Suffer Big Losses

Regretfully 99% of investors will not understand that they need to be out of stocks and move into gold, till their wealth has been wiped out. All stock investors will believe that central banks will certainly support them once more. But as I have described over, this time support will certainly fall short as we begin a secular bear market in stocks, and the global economic crisis will last a very long time as well as lead to massive wide range destruction.


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The End of Money Printing and Neverending Credit

That the global economic situation for the last 100 years was reliant on credit scores as well as printed cash, is not a new miracle paradigm but a sign of a diseased system. The never-ending credit and the constant printing of worthless money are about to end. In a corrupt way, it is virtually paradoxical that the trigger for finishing this sick financial system would certainly be a pandemic disease.

Social Discontent and Anger to Come

Currently, the world remains in a situation when all of those aspects will possibly come to pass. We already have the recession and also we have a condition. There is no significant famine yet however, this is most likely to come. Social discontent and conflict are possible repercussions of these troubles. Starving and angry people will stand against their leaders as well as against the elite. The differences in income, as well as the huge gap that separates the wealthy and the poor, have created an illogical scenario. This is basically without exception just how every change starts.

There is a lot of anger in the community. People aren’t happy at all. They are wondering what on earth is going on with their taxes, they are wondering why the money they earn is never enough, they are wondering why social inequalities have increased, they are wondering where all this abundance of (fake) money is going, and so on.

The Money that does not Exist

Capitalism Faces its Biggest Crisis Ever

Central banks and governments are currently printing limitless amounts of cash to help small and also big organizations as well as individuals. It is a program terrific in that every person gets aid, but no one asks where is the money coming from.

No one stresses that THERE IS NO CASH. The $ 100s of billions as well as trillions that are being provided to the needy do not exist. They are just produced out of thin air. Because the situation started in the very early autumn of 2019 with the Repos, the Fed’s balance sheet has increased by practically $3 trillion to $6.5 T. Yet this is just the start. The forecast is that it will get to $9T in June as well as possibly $12T a couple of months later on.

What we have to keep in mind is that this situation did not start now however, in 2006 when the Fed’s annual report was $800K. By 2012 it had gone to $3T. In the following few months, the equilibrium sheet will certainly blow up by 3-4x to $12T.

In the present year, the US can quickly get to a shortage in unwanted of $4T, taking the financial debt to $28T. If we just go back 3 months, who would certainly have thought a Fed equilibrium sheet reaching $12T as well as a US financial obligation of $28T? They don’t even do that because if they had, they would have known that the United States financial debt has doubled every 8 years because of 1981.

The United States is likely to have a debt of $40T in 2025 however, that number is most possibly a low number. Then we are going to see failings not simply in the economy but also in the financial system. That is the danger the economic system is currently facing as well, as we are currently in a stage when the surprises will be much even worse than anybody can think of.


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Back to the Future

It all began with private lenders taking control of the financial system in 1913 when they established the Fed for their very own benefit. For practically 60 years their power grew slowly however, then in 1971 when Nixon closed the gold window, all hell broke shed.

The United States currently begun what is currently 60 years of shortage investing. Every solitary year given that 1960, the United States is running at a loss. (deficit)

Because the main purpose of political leaders is to purchase votes, Nixon had no choice back in 1971. The United States had currently at that point been running a shortage for ten years. With a gold standard, it is necessary to run a sincere economic system without deficits. Or else you lose all your gold as well as the currency breaks down. Given that Nixon had no intent to run excess, he might not be connected by a gold requirement and also consequently abolished the gold backing of the dollar. The consequences were of course tragic as well as the dollar has actually fallen since.

Back then $33 could buy you an ounce of gold nowadays you need well over $1900. This is how much the dollar has depreciated.

Considering that the US began running deficits 60 years ago, total United States debt has actually gone from $800 billion to $26 trillion today. What we are seeing is a fantasy world all built on financial debt, federal, state, customer, home mortgage, car, trainee, and so on. The checklist is limitless just how to produce phony wealth simply based on the financial obligation.

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US Debt Chart

The US is currently coming back to reality which will certainly be the biggest shock. The trillions of fake cash and fake assets will now implode and also so will certainly the US economy.

What the world has experienced in the last 100 years is fake capitalism. It more looks like Voodoo capitalism. Central bankers, led by the Fed, have successfully taken on Mayer Amschel Rothschild’s philosophy: “Permit me to issue and control the money of a nation, and I care not who makes its laws.”

By doing this, they have placed a spell on the international economic system as well as lumbering it with debt that might never be paid back. They are instrumental in developing a debt-plagued world economic situation as well as then they are the only ones who can come to the rescue and “save” it.

A debt-burdened world can never be saved by even more financial debt. Next, we will certainly see limitless cash printing that squashes money as well as leads to depressionary run-away inflation.

Inflation is on the Way

The reckless money printing by the Fed is expected to bring an inflation crisis. Analysts are convinced that unprecedented money printing could increase inflation substantially. That means your cash will lose value. For example, if you are planning to take a holiday to an exotic location with your retirement savings, chances are that you will not be able to afford it. You could probably end up at a cheap resort nearby.

Business Collapse and Unemployment.Capitalism Faces its Biggest Crisis Ever

Market bulls argue the market is already recovering. Shops are opening, factories are back in business, restaurants are opening too, stocks are holding up, and so on.

They are wrong. Unfortunately, unemployment levels are massive and still growing. Several airlines already declared bankruptcy. Some of them are Avianca from Colombia, Virgin Australia, Trans States airlines from the US, Compass airlines also from the US, and many others. Rolls Royce announced 9000 job losses in the UK, Nissan shuts down its Barcelona plant in Spain with 3000 redundancies, and another 25000 jobs indirectly threatened.

In the US the news is not good either. The country has lost 20,6 million jobs since mid-March, resulting in an unemployment rate of 14,7% a level not seen since the great depression in the 1930s. I am afraid, there will be more business collapse and more unemployed in the following months.

The recession is going to be bigger than the 2008 recession. It will take years for the world economy to recover not months or weeks. The numbers are already massive and still growing. As I just said, the economy is not going to be back to where it was within a year that’s for sure. So why is the stock market still high? What is that’s still driving equity prices? It is the Fed’s liquidity.

Stocks and Bonds set to Collapse

In genuine terms, all bubble possessions will now collapse. Actual terms indicate secure acquiring power and evaluate against gold. We will see supplies, bonds, and also residential or commercial property decline by 90-100% against gold. In nominal terms, stocks may go up at first with hyperinflation. That will just be imaginary gains.

Supplies worldwide dropped initially by around 40% and also have currently recouped half of that loss as stock capitalists have been buying the dips in the hope that central banks will certainly save them yet afterward. Yet they will certainly quickly have their next shock. Markets might begin their next leg down already in the coming week. Or it could take 2-3 weeks. What is clear is that a profane bearish market has begun which has a very long way to go.

Gold is Still Undervalued

For twenty years I have discussed the value of riches conservation in the form of physical gold. Throughout that time gold is up 6-7 times depending on which currency you rate it with. Still, much less than 0.5% of world economic possessions are in gold.

Gold is still exceptionally undervalued regarding the growth of the international cash supply. It is still possible to obtain gold, yet the physical market is under real pressure.

This is an outrageous circumstance that will not last long. Both the Comex and the LBMA are under huge pressure which quickly will lead to substantial distribution problems and also a significant cost squeeze. The home window of opportunity to acquire physical gold at current costs will soon close.

Keep in mind that gold is actual physical wealth in addition to an insurance policy against a monetary system that is unlikely to make it through. Gold can still be bought with miscalculated fiat cash at prices significantly below its genuine value, however, not for too long.

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What Is The Best Way To Store Gold And Silver

What is the best way to store gold and silver

What is the best way to store gold and silver as storing precious metals could be a headache for novice investors. What are the options and which option is the best? Basically, there are three options to store gold.

What is the Best Way to Store Gold and Silver

Options to Store Gold and Silver

  • At home (in a safe or well hidden)
  • In a bank’s safe deposit box
  • In a private storage  firm

There are pros and cons to all options, but home storage or a private vault is the best option. Before we analyze those two options, I will have to explain why the bank’s safe deposit box will have to be excluded.

Storing Gold in a Bank

Banks do offer an excellent level of security and peace of mind, but storage fees can be high, as they can range from $100 to $500 annually. Accessibility is another issue, as the investor can only have access to his gold, during business hours, which coincide with most people’s work schedules. Also, investors will not be able to access their gold during public holidays. These restrictions can cause large problems in the event of a national emergency.

A gold investor puts his money into gold, to protect himself from the risks associated with the fragility of our financial system. To buy gold and then store it in a bank safe deposit box, will be at least inconsistent because, storage of bullion in a bank’s safe deposit box runs the risk of confiscation, due to bank bankruptcy (bail-ins), or the risk of government confiscation.

If you hold gold in a bank, and the bank goes bankrupt as was the case in Argentina, then you lose the advantage of immediate access to a means of payment for your basic needs in times of trouble, when access to traditional means of payment like cash or bank cards is hampered. The risk of bank failure is real and it was repeated a few years later in Cyprus.

There is also the risk of government confiscation and it actually took place in the US in 1933 with President Roosevelt’s executive order 6102. The risk of government confiscation is small but nevertheless is still there. Confiscation could happen if there is panic in the banking system or just before a new monetary system is announced.

Storing Gold at Home

Storing gold at home is the least expensive for storing precious metals, as customers benefit from the absence of storage fees. This form of storage is ideal for customers with small to medium size collections of precious metals. All you have to do is find a secure spot in your house or property and store your valuables.

Before you do anything you must know that keeping gold at home has also a few drawbacks. Investing in precious metals is a completely private decision, the fewer people who know about it the less of a potential target you will be. So don’t tell anyone you keep gold at home, and at the same time make sure it is well hidden.

If thieves find it or if you lose it, it is gone, and it is gone for good. You see gold bullion coins are easy to sell, as they are bought and sold by individuals, coin dealers, banks, and commercial dealers without a question.

Attention, with storing gold bars at home, as in order for the dealer to accept them, you might need to get your gold bars refined,  so the dealer can verify the gold content, which costs money and takes time.

Is buying a safe solution? No, I do not think so. An upright safe is always visible and it does send the wrong message. A hidden safe is also not a good idea either, you see a burglar can find it and if he cannot open it he will come back with his friends. In addition, a punk with a pistol can easily convince you to open the safe.

A sunken floor safe could be a better idea, a safe you can install on the floor of your closet or garage. These safes are generally small but invincible, as the door to them is actually below the level of your floor, often hidden under the carpet.

In my opinion, the best place to hide valuables is up in the attic. A few pounds of gold can easily be stashed in the far corner of your attic and there is no chance that any intruder, is going to go up there and search.

Private Storage Firm

On larger quantities of gold, I recommend the use of a private storage firm (precious metal depository). Precious metal depositories offer top-level security, as they are highly guarded establishments that are under constant surveillance, with all activities inside the depositories monitored and recorded.

Some precious metal depositories offer two forms of storage, segregated and communal. Segregated storage, allows customers to keep their valuables in an individual storage compartment, preserved for private use. In comparison, communal storage, allows customers to keep their valuables in shared storage areas along with other people’s bullion. Both types of storage offer excellent security. Unfortunately, not all depositories offer both forms of storage, so it is important to verify the information in advance before committing to a particular depository.

Furthermore, many depositories offer further means of protection through their accounting-auditing and insurance policies. If after an inventory inspection, an amount of gold is missing, customers should remain confident it will be covered by the insurance policies.

Conclusion

Storing gold should not be a headache, after all the purpose of buying gold is to ensure peace of mind and financial stability. Choose the type of storage you feel most comfortable with and that should be enough.

 

Investing In Gold And Coins

Investing in gold and coins

Investing in gold and coins is something most people have actually thought about it at some point in their lives.

Investing in Gold and Coins

Reasons to invest in gold

People invest in gold for their own reasons.  Some do it to preserve their own wealth, there are others who do it to actually increase their wealth, and many managed it in the past with much success.  There are many reasons to invest in gold, and in this chapter, I will present them to you.

Unlike paper currency or other assets, gold has a history of holding its value.  People like to invest in gold because they see gold as a way to preserve their wealth from generation to generation.  In reality, gold is a hedge against inflation. The limited supply of gold combined with the increasing demand in countries such as India and China is another factor that influences the price of gold.

In addition, gold is a hedge against geopolitical uncertainty, and my word our times are troubled times. Furthermore, portfolio diversification along with the weak dollar are two very important reasons for the investor to put his money into gold.

How to invest in gold

In the old days, there was only one way to invest in gold and that was only by acquiring gold itself, mainly in the form of jewelry and gold coins. During the centuries there have been many changes and nowadays, the investor faces a very difficult task, due to the fact that there are many options available.  In this post, I intend to inform the investor on the ways he, or she, can actually invest in the safe haven gold.

Direct ownership, in my opinion, is the best way to invest in gold.  Why?  There is nothing like pure gold in your hands, it is certainly better than money.  Its value cannot be changed or controlled by governments and that is the reason for governments to go off the gold standard.

Investing in gold bullion bars?

A gold bar is a quantity of fine metallic gold, that is manufactured by a bar producer meeting the exact standard conditions, such as labeling and record keeping.

Bars are the most traditional way of investing in gold.  In many countries, they can be bought directly through banks.  Bars are available in various sizes, 12kgr, 1kgr, 100gr, 50gr, 10gr, 1gr, etc.

The standard gold bar held as gold reserves and traded as such by the central banks, is the 400-troy-ounce. (12.400 or 438,9 ounces).  The 1000gr bar or the kilobar is the most popular bar among investors, and it is used extensively for trading and investment. The premium of these bars when traded, is very low over the spot value of the gold, making it ideal for small transfers between banks and traders.

Nevertheless, the bar’s purity must be 99.5%  (24 karats) at least, whereas there is a number of manufacturers producing bars at 99.9% purity. (24 karats too)

Investing in gold bullion coins?

Bullion coins are coins made out of precious metals with one purpose only, that of investment or store of value, rather than used in day-to-day commerce.  Many countries have their own bullion coins such as the British sovereign, produced by the British, the American Eagle series of coins available by the U.S. mint, and many others.

Bullion coins are produced in many different weights.  They are usually in fractions of one troy ounce, but some bullion coins are produced in very limited numbers in kilograms or more.  Bullion coins are usually available in gold and silver, with a couple of exemptions, (the Krugerrand, and the Swiss Vreneli) which can only be found in gold.

Bullion coins are priced according to their fine weight plus a small premium, based on supply and demand, as opposed to numismatic gold coins, which are priced mainly by supply and demand, based on rarity and condition.

Bullion coins sell, for a premium over the market price of the metal on the commodities exchanges.  This premium is due to the underlying demand for bullion coins, their small size, and the costs of manufacture.  In addition, the amount of bullion varies depending on the coin’s type, weight, and precious metal.

Other ways of investing in gold

Gold options and futures currently trade on various exchanges around the world and over the counter directly in the private market.  They are suited to the sophisticated and experienced, who can speculate on price movements in either direction.  The risk is high, and so are the profits and losses too.

The companies that produce the gold themselves as shares in gold mining companies.   If the gold prices rise, so will the profits of the gold mining companies and as a result, the share price will also rise.   However, there are certain risks here an investor has to take into account.  Mines are commercial enterprises, with problems such as flooding, subsidence, structural failure, mismanagement, negative publicity, nationalization, theft, and corruption.  Such factors can lower the share value of mining companies.

Gold Exchanges Traded Funds (E.T.F.s) are a very interesting way to invest in gold.  An E.T.F. is a type of mutual fund, that trades on a stock exchange like an ordinary stock.  The E.T.F.’s exact portfolio is fixed in advance and does not change, therefore the E.T.F. holds gold bullion as its own asset.  E.T.F. offers a practical way to invest and hold gold.

Investing in gold IRA’s

A gold IRA investment is an individual retirement account, an account that functions the same way as a regular IRA account however, instead of holding paper assets, it holds physical bullion coins or bars.

Gold is the type of investment that can protect when times are hard, and at the same time will also offer significant gains to your nest egg.  Back in 2001, an ounce of gold cost $271,00.  Ten years later it reached $1896,00, an increase of almost 700%.   During that time, banks and currencies collapsed, and the real estate market collapsed, but gold didn’t.  In particular, gold fed from these calamities, it was the rediscovered idol, in the time when everything else collapsed, from mortgages, credit default swaps, and derivative products, too complicated to even understand.

As you can see, a standard IRA, an IRA invested totally in stocks bonds and other funds are actually putting your hard-earned money at risk.  You are relying on government, weak currencies, economies, and large corporations.  Gold and silver can actually safeguard your investment.

Since the 2008 financial crisis, gold IRAs have become very popular.  Record gold sales, combined with the appearance of many more, that simplify the transaction, have made investing in an IRA a one-shop stop.  The result is robust IRA growth.

Nowadays, it is absolutely necessary for the investor to invest a portion of his/her savings in gold, as the dollar is still weak, there is geopolitical uncertainty, the country’s (US) trade deficit is out of control, and the potential inflationary impact of the Federal Reserve’s, stimulus programs.

How does it work?

It works the same way as a regular IRA account, however, instead of holding paper assets, it holds physical bullion coins or bars.

Investing in gold and coins should not be taken lightly. Do your own research and make sure you invest in gold the right way the way that suits you more.

Choosing the right gold broker

Choosing the right gold broker is always a difficult decision.  It doesn’t matter where an investor is prepared to invest, it is absolutely necessary to research and make sure his/her hard-earned money doesn’t go to waste.  In order to ensure the above and at the same time maximum earnings, it is important for you to read this page.

Selecting the appropriate broker

Check out the comments regarding the firm, especially the complaints, and see how these complaints were handled.  If there is a long list of complaints, then this is a sign to worry about.  Also, check the number of years the company operates, you want ten years of solid record.  Finally most important is to choose a firm with a commitment to keeping you informed.  Keeping you informed now and in the future.  If a salesperson gives you short shrift or hits you with a high sales pitch, then this is bad news.

LBMA members 

The LBMA (London Bullion Market Association) is the competent authority for the world bullion market, and the bank of England oversees it. It is imperative for the bullion to be produced by an LBMA-approved refinery.  This way, the gold bullion coins or bars are meeting the standards set by the LBMA.  In a few words, you are getting what you’ve paid for.

Direct storage outside the banking system

Storage of bullion should be outside the banking system, this way the possibility of confiscation due to bank bankruptcy (bail-ins), or government confiscation is eliminated. Storage should be direct to the client’s name with no intermediates.  This way there is no risk of the investor losing his/her investment, in case the broker goes bankrupt.  The investor should be provided with a storage certificate by the independent storage company.

Buyback, shipping, and pickup services 

The gold firm should be able to provide the client with several important services that include:  a buyback service a pickup service, and a shipping service as many clients would prefer their gold kept at home.  At the same time it is important for the dealer to be accessible to its client’s questions and queries, and give answers and solutions promptly.

 Vault location

The location of vaults is very important.  A vault should be located in a free trade zone to avoid taxes or duties.  There are many trade-free zones in the world, and most vaults are located there.  (Singapore, Toronto, Switzerland, New York, etc.)

I hope my post on investing in gold and coins has got you covered. If you still have any questions feel free to let me know in the comment section.

 

 

-What Is Gold Investment?

What is gold investment?Of all precious metals, gold has been the most popular as an investment.  Although the gold market is also subject to speculation and volatility as are other markets, investors invest in gold, to diversify and reduce risk, especially through the use of futures, contracts, and derivatives due to the fact that gold has shown to be a hedge against inflation and economic uncertainty.

What is Gold Investment?

Every time there was political and economical instability, gold was called upon to save the day, and it actually did that.  When paper currency losses its value and global inflation starts rising, gold offers security and acts as a safe haven for investors.

Common people invest in gold, investors invest in gold, banks invest in gold, governments invest in gold, and even countries invest in gold.  Recently countries such as Russia and China, are buying large quantities of precious metals.

People invest in gold for their own reasons.  Some do it to preserve their own wealth, there are others who do it to actually increase their wealth and many managed it in the past, with much success.

Political turmoil and geopolitical uncertainty are something the markets hate.  The Trump election victory, the negotiations for Brexit, the upcoming elections in France, and Germany the political turmoil in Turkey, and the instability in northern Africa and the Middle East make gold an attractive investment.

At the same time inflation is starting to rise and gold loves that.  In addition, the dollar is still weak, the stock market is overrated and the US debt crisis is out of control.

Supply may also be an issue because gold is not inexhaustible.  Many mines close, but the new mines that open are always fewer.  On the other hand, industrial demand for gold is on the increase, especially in technology, computers have gold, and so are mobile phones and many electrical appliances.

Due to all reasons analyzed above, gold as an investment is at its best now.  The advantages are too many and are overwhelming.  This, of course, is my personal opinion.

I hope my what is gold investment post has got you covered. If you still have more questions let me know in the comment section.

 

-What To Do Before Investing In Gold

-What To Do Before Investing In Gold

Before you go ahead with your investment in gold or silver, there are certain actions you need to undertake, if you want to ensure your investment is safe.  After all, investing in gold is just an investment, and requires money, many times the savings of a lifetime.-What To Do Before Investing In Gold

Gold is just an investment, an investment that can be profitable under the right circumstances.  An investor must never be passionate, must always keep a cool head, because gold in a certain environment tends to do well, and in other markets, the environment tends not to do well.  The investor will have to examine whether this is the right time to put his/her money on gold or not to.

There are several reasons to invest in gold.  The two most important are: a) to protect and preserve wealth from unexpected events.  b) a hedge when the stock market is not expected to do well.

To an ordinary person, a good reason to invest in gold is when paper money is worthless.  That has happened several times, especially in the seventies when due to high inflation, paper money even the dollar lost its value dramatically.  Low or negative interest rates, is also another reason for an ordinary person to preserve his/her wealth.

What type of gold investment

There are two types of gold investment, physical gold, and paper gold.  Physical gold is tangible, jewelry, gold coins, and gold bars.  While paper gold consists of the E.T.F.’s, gold exchange-traded funds, or gold-related equities in the stock market.  The latter is risky, as there is no guarantee that the fund holds the amount of gold it claims.

Why should your portfolio include gold?

Gold is the best way to diversify your assets.  When the price of gold moves the opposite way of other types of investments, it balances out your returns when the other investments perform badly.

How pure your gold should be

Pure gold 100% is too soft, therefore it is mixed with other types of metals, (silver, copper, etc) to improved its strength.  Based on the content of gold, it is divided into Karat configurations.  9K(37.50%) 14K(58.33%) 18K(75.00%) 22K(91.66%) 24k(99.99%)   Make sure you are getting what you paid for.

What is the real price of gold?

Just like anything else, supply and demand determine the price of gold.  Other factors include Interest rates, inflation, political instability, stock market prices, and currency prices.

Where you should buy physical gold 

In many countries, you can buy gold directly from the bank.  You can also buy gold coins or bars online after you find a credible trader.

-Political Uncertainty And The Weak Dollar Favor Gold

-Political Uncertainty And The Weak Dollar Favor Gold

Just a few weeks ago Donald Trump became America’s 45th president. Judging by his first two weeks, I can say that his presidency brings uncertainty and chaos.  Uncertainty and chaos, are exactly what the markets love to hate.  If you add to that the weak dollar, then you have the perfect recipe for gold.  You see, the weak dollar and political uncertainty favor gold.-Political Uncertainty And The Weak Dollar Favor Gold

Uncertainty cannot be planned for, cannot be predicted-can only be estimated, and can be wildly and unexpectedly wrong.

The United States economy is the biggest economy in the world, it has the biggest GDP in the world. (16.77trillion)  It also has the biggest debt in the world. (17.60trillion)

Because of this difference in size, most people think it’s insulated from the actions of the world economic climate.  In addition, the dollar is the world’s reserve currency of choice, and America has been used to have the first word, on many fronts economically.

However, this is about to change.

In recent years, the gap between government income and expenditure has widened due to the degree of military service, and social security commitments, and at the same time, productivity and educational levels, is where its fallen behind.

Without radical change, this gap could reach a point of no return.  In this case, the dollar will weaken to a degree unseen in recent years.

At the same time, Russia and China are teaming up in their efforts to replace the dollar, as the world’s reserve currency.  And this is possible due to changes in the IMF’s voting system.  The BRICS (Russia, India, Brasil, China, and Sth. Africa) have now collectively more votes than the US alone. That means the dollar will soon be in danger unless the Trump administration decides to reform the US financial system.

In addition, when it comes to the US balance of trade, the news isn’t good either.  The trade deficit for the year 2016 was $502.25 billion, a 0,4% from the year 2015.  This will also weaken the position of the US dollar role, as the world’s reserve currency.-Political Uncertainty And The Weak Dollar Favor Gold

It is imperative that you preserve the value of the things you have and I am talking about your savings.  Rather than investing in bonds, shares, and other paper holdings, I suggest that you invest in gold.  In this case, when you do come to draw down the money, there will be far more to take.  That is the whole idea behind it.

Remember investing in physical gold hedges you against inflation, and protects you if the dollar collapses.