Should I Invest in a Gold IRA?

should I invest in a gold IRA

Should I invest in a gold IRA is the question that still many ordinary folks ask themselves. In this post, I will outline the reasons for ordinary folk to invest in a gold IRA account.

Any investment asset has certain risks, some higher and some lower. The idea when investing is to know exactly what the risks of a particular asset are, in order to make the right decision, the decision that suits your needs best and at the same time minimizes your risk. Over the years, we’ve seen many investors lose their fortunes because they just got too greedy.

Many investors should be asking themselves the should I invest in a gold IRA question more often, this way they will be able to make a better decision regarding their IRA investment.

The same applies to your IRA investment. An IRA invested solely in mainstream assets will put your savings at risk in case of a market crisis.

For example, last year (2020) between February and March the stock market lost 10.000 points. As a result, trillions of dollars invested in stocks bonds, and other mainstream investment products were lost. Many IRA investors had to postpone their actual retirement time, due to low funds in their retirement accounts.

Gold IRA Definition

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 IRA vs Traditional IRA

A gold IRA is treated by the IRS as any other IRA. The difference between the two is that a mainstream IRA is invested in mainstream assets such as the stock market, government bonds, options, and so on whereas in a gold IRA the money is invested in gold. The IRS has also allowed IRAs to be invested in other precious metals such as silver, platinum, and palladium. Moreover, Cryptocurrency IRAs are also allowed.

should I invest in a gold IRA

A gold IRA is an asset that holds its value, especially during bad economic times. A gold IRA will secure your savings and offer financial stability to your investment.

A traditional IRA investment (401k, SEP, Thrift, Roth, and so on included) invest in traditional assets, such as the stock market. Although these types of investments can offer great returns, they are subject to large fluctuations during difficult times. That means you could see your money disappearing in a very short time.

Reasons to Invest in a Gold IRA

  1. Diversification. In an investment portfolio putting all eggs into one basket is a big mistake. A prudent investor should include different types of investments just in case things go wrong. Gold is the asset that will diversify your investment portfolio.
  2. Protects your investment from inflation. Inflation rates will rise to high levels thanks to endless money printing by the Fed. High inflation rates are bad news for your dollar. In a high inflation environment, your purchasing power will drop substantially.
  3. Gold is a tangible asset.
  4. Gold is not a chain in someone else’s liability. eg. Having your money invested in a company’s shares and the company goes bust due to illegal activities or because it took the wrong business decisions.
  5. A gold investment protects your savings from geopolitical uncertainty. If a war breaks in the Middle East, for example, the traditional investment assets will take a downturn (stock market) but not gold and other precious metals.
  6. Increasing demand for gold and silver for industrial use. eg gold is used in computers mobile phones and so on.
  7. Low or negative interest rates. That means your dollar loses value every single day if it is stored at the bank.
  8. The weak dollar is more bad news for your life savings
  9. The stock market bubble. We are witnessing an unprecedented bubble in most assets. The stock market bubble though is the one that once it bursts it will actually cause the biggest problems in the economy because this particular bubble is a huge one.

Rotten Political and Financial System

The newly elected Biden administration is faced with an almost impossible task. First, the social and political divisions of this great country should be addressed. Then something must be done to deal with the covid19 virus and then something should be done to change the monetary system.

should I invest in a gold IRA

Most finance experts and market analysts agree that today’s fiat currency monetary system does not work. Since its introduction back in 1971 it has only created disorder and turbulence in the economies and the markets.

Unfortunately, we are faced with irresponsible individuals who do not have the political will and guts to make the right decisions for themselves and for the country. In addition, central bankers are also responsible for this, because they have seen their profits skyrocket, at the expense of you and me, and they do not want that to change.

The Abandoned Gold Standard

In 1971 President Nixon abandoned the gold standard policy. It was a move that surprised the western world. The US kept cheating the rest of the world by printing cash in order to finance the Vietnam war. There was only one way for the US to get out of this and that was to abandon the gold standard policy.

What President Nixon started in 1971 is now leading to an uncontrollable money printing bonanza. Nevertheless, money printing has been carried out in the past in most western economies. Nowadays though the money printing programs that take place right now are enormous. President Trump and the Fed carried out a gigantic 2,5 trillion money printing program. The new Biden administration is willing to add another three billion fake money to the economy.

The Europeans too agree to raise a 2,1 trillion dollars stimulus package. Their funds will be raised by selling bonds collectively. In addition, similar money printing and bond selling programs have-are been carried out by most western countries.

Financial Crisis is on the Way

All these money printing and bond selling programs mean more debt for the bond sellers and worthless money flooding for those who chose to print cash. The results from these are likely to be.

  1. Further weakening of national currencies including the American dollar
  2. High inflation levels
  3. A large drop in our purchasing power
  4. Mainstream assets (stock market, etc.) to take a large fall
  5. Gold and other precious metals will see their value increased substantially
  6. Mainstream IRA programs will suffer big losses

should I invest in a gold IRA

Gold IRA Benefits

You may regret if you choose a conventional IRA or 401(k) investment with a bank or brokerage firm. The stock market bubble is expected to decimate traditional investment assets. Stocks, bonds, and so on will see their prices drop substantially. That means your, life savings could perish overnight and in the end, there won’t be enough savings for you to retire.

Since most IRA accounts are invested in traditional assets, and since all these assets move downwards or upwards together, (correlated assets) there must be another asset that does the opposite.

On the other side gold is a non-correlated asset. (an asset whose value isn’t tied to larger fluctuations in the traditional market) In fact, gold always does well in times of crisis. Call it a financial crisis, recession, geopolitical tensions, war, covid-19, trade war, whatever the case is, gold not only maintains its value but also sees significant gains.

Black Monday1987Iraq-Kuwait War1990Dot Com Crash2001Financial Crisis2008Stock Market Decline-38.9-22.5-27%-34%Gold Price Results+5%+7.5%+1%+5%Gold Outperformed Stocks By Ratio45:131:129:140:1

========>related articles  Gold IRA frequently asked questions

Conclusion

We have seen the risks involved with a mainstream investment portfolio. Prudent investors do not put all eggs in one basket. This is applicable right now because we are facing an overvalued stock market and the effects of the uncontrollable money printing policy.

An IRA investment should be low-risk or risk-free. That’s because it is made of money that is not in abundance but your own hard-earned savings. In addition, if that money gets lost, then you will have nowhere else to turn to.

Since the IRAs are made of hard-earned money then, extra care should be taken to make sure the investment is well protected. Considering gold is a safe-haven asset during bad times, then a gold IRA will ensure that your life savings will not perish overnight in case of a financial crisis.

Should I Invest in a Gold IRA?

There is no doubt the evidence for investing in a gold IRA is overwhelming. However, when investing your life savings all care should be taken in order to avoid possible traps and mishaps.

 

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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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Gold in Short Supply-What's Next?

Gold in Short Supply-What’s Next?

Gold in Short Supply-What's Next?
gold storage

Metal producers are reducing gold production due to government restrictions in response to covid-19 concerns. Coronavirus also caused all European precious metal refineries to shut down and disrupted transportation. 1/3 of NYSE listed gold mines have withdrawn 2020 production guidance. The South African government imposed a 3-week shutdown of the country, which means temporary mine closures.

Metal Mines Shutdown

In particular, South African prime minister Cyril Ramaphosa has imposed a 21-day lock down in all mining activities, after a surge in coronavirus cases. South Africa is a leading producer of metals and minerals such as, silver, platinum palladium, coal, gold and iron core. To be precise, 70% of global platinum comes from South Africa along with 40% of palladium.

Gold mining a labor intensive mining industry, is a potential hotbed of infection among the thousands of miners, who often work in confined spaces, with some living nearby in cramped accommodation. Meanwhile, furnaces and underground mines will undergo a maintenance program, to make sure mines will be in a condition to reopen in the future.

In addition, many more mines around the world paused production. For instance, the Mponeng mine in Argentina, the Cero Corona mine in Peru, the Salares Norte in Chile and many more others. Furthermore, global mining giants Anglo-American and Rio Tinto have reported production slowdowns, all due to coronavirus related restrictions.

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More Supply Concerns

The miners lock down isn’t the only reason for precious metals supply shortage. Coronavirus, has caused all European gold refineries to shut down due to government orders. With online shops out of stock and many of the passenger planes that move bullion grounded, physical gold is becoming harder to track down.

Right now, anyone looking to buy physical gold has an issue. The supply problem due to transport and processing capacity has been worsened by a surge in demand, as investors seek the safe heaven asset amid the global oncoming economic crisis.

Fewer people are selling gold back to dealers despite the excellent gold prices. Those who want to sell are finding difficult because of restrictions on travel and stocks.

Print More Money

Gold in Short Supply-What's Next?

The response by politicians and central banks to print huge amounts of currency, (money) in order to keep their economies out of trouble, will cause the intrinsic value of money to fall. That means consumer purchasing potential will be reduced. In other words, you will be buying less with your dollar, euro, pound etc.

Conclusion

The shortage in gold supply trigerred by miner’s shutdown, the European refineries closures, transportation problems and the never ending appetite for gold, will result in a price surge. All other precious metals, silver, platinum and palladium will follow too. In addition, the out of control money printing policy adopted by central banks ensures the precious metal price boost, is here to stay. If you are thinking of buying physical gold, now is the time, as there are reports of shortages in some coins, Krugerrands from South Africa and Maple leafs from Canada.

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