18 REASONS TO BUY GOLD IN 2018
NEW CHALLENGES AND CHOICES SERVE TO ENHANCE THE VALUE OF GOLD
More than the symbol of prosperity and prestige it has been throughout the history of civilization, gold remains a true store of value today. That it will be anything less than this at any time in the future is inconceivable. That is why, in the face of the latest investment options and instability in the political and financial landscape, gold is still an integral part of a prudent wealth portfolio.
In this list you will find the many time-tested reasons (along with several new ones) why now is the time to add gold bullion, or add more of it, to your holdings.
- Gold keeps its value. Its price fluctuates but does not depreciate the way currencies do.
- Gold is money, easily and quickly converted to cold hard cash.
- Gold is tangible. That is real wealth that you hold in your hand.
- Gold is indestructible. It is impervious to fire, water, and time. Nor can it be hacked.
- These first four reasons demonstrate gold’s superiority to cryptocurrencies and paper assets. Physical gold is invulnerable to the fatal risks inherent to the digital world.
- The doubts and questions that bedevil cryptocurrencies — volatility, liquidity, reserve guarantees, cyber-security, mysterious backers — do not apply to gold.
- Gold is international, holding its value practically everywhere you go in the world.
- Gold is dense and portable. A great deal of wealth is packed into a compact object that can be held, moved, and/or stored at a reasonable cost.
- Gold, as your physical possession, is yours and yours alone, with no need to involve any other person, entity, or contract. There is no counterparty risk. Further to this point, gold can be a completely private and confidential asset. As long as it remains in your possession, there is no need for anybody to know that you own it.
- As an insurance policy against economic or political crises, gold has no equal. Holding physical bullion in a private vault (outside the banking system) is the ultimate answer to the question of how to protect yourself against the winds of change and the whims of governments as they come and go.
- Gold’s function as a hedge against economic turmoil becomes increasingly vital in 2018. The national debt of the United States, already passing $20 trillion, will balloon by another trillion dollars over the next decade because of the current administration’s new tax bill alone. Overall government expenditures are expected to contribute to trillion-dollar deficits every year. And interest rates are rising, meaning the payments on the debt are rising. Meanwhile, the US dollar is losing value.
- Despite the rise of interest rates, the US Federal Reserve (even under its new Chairman) appears committed to a slow rate of increase, reducing its usual downward effect on the price of gold.
- Gold’s perennial status as a safe haven for investors when political tensions turn to full-blown conflict makes it more than deserving of your immediate consideration in 2018. International divisions are widening, from the war of words and posturing between the USA and North Korea, the growing influence of Russia and China on the world’s financial and political landscapes, the undercurrents of violence and terrorism that regularly explode to the surface, Brexit, and so on.
- This geopolitical turmoil has another direct effect on the price of gold. Various nations are building their gold reserves, notably Russia, which continues to be hampered by Western economic sanctions. And China, seeking greater influence on international financial markets, is acquiring gold to back up its currency as it strives to decouple from the US dollar. These two countries alone are buying up billions of dollars of bullion and others are following suit, exerting an upward influence on the price.
- The planet is experiencing worsening natural phenomena that occur with or without warning, abroad and at home. Beyond the immeasurable human tolls of death, displacement, and the full gamut of financial cost and loss, the greater frequency of catastrophic floods, fires, earthquakes, etc. puts enormous stress on people and societies. Protect your financial health by dedicating a percentage of your holdings to physical gold, preferably in a vault, outside the banking system.
- It is always better to buy before the crisis hits. When it does, there is no question that the price of gold will skyrocket.
- While one cannot say with certainty whether the predicted gains in the price of gold will come true in 2018, leading world expert Egon von Greyerz calls the current price, whatever it is, “a gift.”
- Gold is becoming scarce. Mine production fell in 2016. It was only marginally higher in 2017. There are fewer new gold mines year to year. Eventually there will be no gold left to produce. We don’t think you need an explanation of what depletion of this extremely valuable resource will do to its price. Buy. Now.
This article was originally published by GOLD BROKER | JAN 2, 2018
Is A Stock Market Collapse Really on The Cards?
In a recent article, world-renowned finance expert, Egon Von Greyerz stated that a stock market collapse and a surge in gold investment is imminent, the question is what will be the trigger?
The question I want to ask first is, is a stock market collapse really imminent, let alone any collapse resulting in a rush to invest in gold?
The only way to answer that is to look at the evidence that is before us, evidence that shows us that we could be heading for a collapse in the stock market.
Federal reserve building, Washington DC. USA.
Since the financial crisis of 2008, the main money men of the world have increased world debt in the last 7 years by nearly 50%. In 2008 the worldwide debt was $150 Trillion dollars and at the start of 2015, it had increased to over $220 Trillion, an increase of $70 Trillion that came about because the financial institutions in major countries have been carrying out quantitative easing to free up the pressure on them. The purpose of quantitative easing is to create money by buying securities, such as government bonds, from banks, with electronic cash that did not exist before. This new ‘ cheap money‘ swells the size of bank reserves in the economy by the quantity of assets purchased—hence “quantitative” easing. Like lowering interest rates, QE is supposed to stimulate the economy by encouraging banks to make more loans. The problem is, people are not borrowing, so the debt continues to swell.
Sources: The Economist, The London Daily Telegraph
On top of the above, you also have the financial bailouts of countries such as Ireland, Spain and most publically recognised, Greece, which naturally add to the debt on a daily basis.
The Biggest Evidence Financial Collapse is Coming
Looking at all the evidence out there concerning potential stock market or financial collapse (and the above is only the tip of a very large iceberg), it is easy to be speculative about our financial futures. But when the International Monetary Fund (IMF) states at their conference in Peru last week, that sustainable recovery has failed and cheap money has led to bubbles and debt and the fact that they have not even finished fixing the flaws in the global system that were exposed by the last financial meltdown in 2008, it seems we are in for a very fragile state right now.
On the subject of a potential stock market collapse, the IMF said ” “Shocks may originate in advanced or emerging markets and, combined with unaddressed system vulnerabilities, could lead to a global asset market disruption and a sudden drying up of market liquidity in many asset classes,” the IMF goes on to say in their report that some markets do appear to be “brittle”
Source: The London Guardian Newspaper
Is Investing in Gold The Answer?
Historically precious metal, especially gold, has performed well gainst the performance of stocks and shares (see my page on gold investment), and is immune to any collapse, because it sits outside the financial control of banks and financial institutions. Physical gold and some silver stored outside the banking system will be one of the few ways to preserve wealth over the coming years. I strongly recommend you read the full article I referred to at the beginning, by Egon Von Greyerz, if you are serious about protecting your financial well-being from the financial situation that is clearly on the horizon. You can also check out my page on where to buy gold, so you can get a more inciteful indicator on what is involved and the benefits of investing.
Earlier this year, CNBC ran a sequence of articles where they raised a number of valid and important questions as to why Russia wants more gold. (source)
The Central bank of Russia has announced plans to increase its reserve level from $300 billion to $500 billion. Now how Russia plans to do this is unclear, however lets look at three major facts for a moment that have negatively impacted on the Russian economy:
- Russia has for some time been trying to stabilise the value of the Russian currency, the ruble, by selling a mix of currencies including the US dollar.
- Its war with the Ukraine has brought about sanctions that has put them under economic strain
- As the world’s leading energy supplier, the fall in the price of oil has impacted on Russia greatly.
These factors, along with others, have contributed to the economy of Russia to actually contract by 1.29% and this is a result of 12 months of continual contraction.
graph courtesy of http://www.tradingeconomics.com/russia/gdp-growth
Now when you consider that Russia is the largest country in the world and the fifth largest economy, along with being the world largest producer of oil (no it’s not Saudi Arabia, there output is only 13% compared to Russia’s 14% (figures courtesy of Wikipedia)) along with gas, you can see why having a stable economy is vital.
So how are they going to do it?
Well one of the fastest and most common ways to bolster an economy is through the purchase of gold. In an article on CNBC, they stated:
“Rumors last week that Russia was on the verge of selling its gold reserves were quashed with the news on Friday that it has continued to add to its holdings. However, John Butler, chief investment officer at Atom Capital, and Alasdair MacLeod, the head of research at online bullion exchange GoldMoney Foundation, believe that Russian President Vladimir Putin could bring the country onto some sort of “gold standard” to try to shore up its economy. “
It is no secret that Russia does have an interest to distance itself from other currencies that are inflating in value. Putin wants to base the Russian economy on sound investments and the best way to do that is, through gold.
What evidence is there to suggest that?
Russia increased its holding of gold in December last year to just over 38 million ounces, an increase of over 1 million ounces from the previous month (source) and it continues to do so each month. Although the country is a long way off from having a currency that is backed completely by gold, it is moving in the right direction
On the 5th January we saw gold take an up turn in its value, and it has been continuing ever since.
Yesterday (15th January 2014) Switzerland made the unusual move to end its peg to the Euro. As a result of the Swiss action, currency brokers around the world were affected by heavy losses. One example of this was Alpari, based in the city of London, who had to enter into insolvency. Sadly the list continues to grow of those firms who have been negatively affected by the decision.
What this decision also did was it also had an impact on the price of gold.
Gold increased over night in value by $15, to £1277. Speculation continues to grow that the price will rise even further, with companies FX companies looking to protect themselves as best they can, by diversifysing into gold.
Until this can be confirmed, we will continue to monitor the price of gold as we do, however for those who have invested in the precious metal, the future looks very bright.
If you have considered investing in gold in the past and want to review your options even further, we suggest you check out our full gold ira review page, where we have fully investigated the main providers of gold.