Is Gold or Silver a Better Way to Hedge Your Bets? | The Gold Standard 2427

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Jennifer Horn and Ken Russo are joined by a long-time client of Midas Gold Group, Joan M. They discuss the advantages of owning gold and silver and explore how these precious metals offer stability and some security during times of uncertainty. As with every episode, Ken once again channels the spirit of President Nixon as he revisits that fateful decision on a hot August night in 1971. The Nixon Shock, taking the United States off the gold standard, was a pivotal moment in our history.

The Nixon Decision

A series of economic measures, affectionately known as the Nixon Shock, was intended to be temporary. At least, that was the official story. The decision unpegged the dollar from gold and enabled a free-floating approach to currency, thus ending the Bretton Woods system. Nixon said he intended to resume the dollar’s convertibility to gold after reforming Bretton Woods, but that plan was abandoned in favor of a secret deal Nixon and Kissinger made with Saudi Arabia to trade oil only in dollars. Say goodbye to sound money, and hello to petrodollar.

Weaponization of the Petrodollar

This agreement effectively cemented the dollar’s dominance in global trade, as countries needed to hold substantial dollar reserves to purchase oil. The petrodollar paved the way for the weaponization of the US dollar as the United States leveraged its control over the global financial system to impose economic sanctions and exert geopolitical influence. The dollar became a tool of economic warfare. Countries that run afoul of US policies can find themselves cut off from the global financial network, facing restrictions that can cripple their economies.

The Advantages of Owning Physical Gold

One significant benefit of owning physical gold is its role in portfolio diversification. Gold has a low correlation with other asset classes, such as stocks and bonds, meaning its price movements are often independent of those markets. This can help reduce overall portfolio risk and volatility. Additionally, gold is considered a haven asset, providing stability during economic uncertainties and market turbulence. For instance, gold has increased in value by over 12% since last year, reaching record highs above $2,400 per ounce in 2024. This consistent appreciation underscores its ability to preserve wealth over time. By owning physical gold, investors can protect their assets from inflation and currency devaluation, ensuring long-term financial security.

The Advantages of Owning Physical Silver

Owning physical silver offers distinct advantages that make it a strategic investment. Silver has significant industrial applications. Silver is a crucial component in various industries, including electronics, solar power, and electric vehicles. Silver is used in the manufacturing of batteries, military equipment, and the production of 5G antennas, making it indispensable in modern technology. Growing sectors like solar power are fueling a good part of this demand. Other drivers include photovoltaic cells and electric vehicles. While industrial demand for silver increases, supplies are diminishing. In 2023, silver experienced a deficit of 184 million ounces, leading to a 60% price increase over the year. Silver mining has been stagnant for the past decade. It’s easy to see why many speculate about the price of silver being artificially suppressed. Keeping silver prices low benefits various industries that rely on the metal. Higher prices could negatively impact production costs and market stability. Despite these manipulations, silver has been outperforming gold since the beginning of 2024. Investors are rediscovering its value as both an inflation hedge and a critical industrial metal; a dual role that ensures continual demand for silver.

Gold & Silver: Timeless Stores of Value

Gold and silver have stood the test of time as reliable stores of value, enduring through the rise and fall of civilizations across the globe. For thousands of years, these precious metals have been treasured for their ability to preserve wealth and provide financial security. From ancient currencies and royal treasures to modern investments, these precious metals consistently prove their worth. In today’s uncertain economic climate, owning physical gold and silver is a hedge against inflation, currency devaluation, and market volatility. Your wealth is protected no matter what challenges arise. Nothing can replace the tangible security and historical reliability of owning precious metals like gold and silver. Whether through gold’s unparalleled stability or Silver’s dual role in industry and investment, these metals will continue to shine as symbols of enduring value and prosperity.
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