Reasons Why Smart Investors Own Gold | The Gold Standard #2205

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Smart investors have always owned some gold in their portfolio, but what are the reasons why, especially now, farsighted investors are diversifying more and more into precious metals?

For one thing, there’s never been a market like this before. Ken Russo points out early in this episode, we’re living in a time of multiple crises. Ken says, “Just put anything in front of the word crisis, and we’ll probably have it within the next five or ten years.”

The Fake Economy

Since the beginning of The Gold Standard broadcasts, Dave Deno and Ken Russo have warned of financial volatility and economic uncertainty increases. Now, that seems like an understatement. The Bible tells us, “so shall you sow, so shall you reap.” What have we sown? Ultra-cheap money allowed corporations to raise capital in massive amounts last year. As housing prices skyrocketed, buyers lined up and shouldered huge mortgages, like Atlas balancing the world on his back. Government debt-to-GDP ratios have swelled beyond belief.

The Turning Point of a Most Unusual Market

The current market is quite different from the financial crisis of 2008. The global economy has been in the dumpster for some time, but cheap money has propped up the market and drove asset prices to staggering highs. Want more toppings on your sundae? Well, we’re out of everything. You name it: oil, gas, coal, copper, or whatever. We’re experiencing the perfect definition of shortages. And that includes a shortage of free money, and investors see the writing on the walls. The Fed recently confirmed it would stop the bond-buying program and raise interest rates soon. Markets expect the rates to increase a minimum of four times this year.

Balance A Portfolio That Can Go the Distance

Savvy investors are looking at the long-term, and most of them are expected rate hikes to begin somewhere in the second quarter. It’s not the time to take advantage of short-term benefits, even if you could find them. Smart investors know they’re better off balancing a portfolio that can withstand a socio-economic-political storm and go the distance. Diversification is not just a good idea but could make all the difference on how intact your wealth will be a few years from now. Even the most optimistic investor might consider just a little more gold this time around.

Gold Preserves Wealth

Gold is essential to the wealth of nations and the general health and well-being of the global economy. That is why central banks and other financial organizations, like the International Monetary Fund, hold tremendous amounts of gold bullion.

Want further proof of how well gold preserves wealth? Just check today’s spot price of gold and compare it to 1970 when an ounce of gold was around $35. A person in business could buy a new suit for $35 back then. What can $35 purchase today? A modest dinner for one? A half-bag full of groceries? You wouldn’t be able to buy a suite with it. If you had purchased an ounce of gold in 1970 for $35 and converted it for today’s prices, it would still be enough to buy a brand new suit and probably some accessories. It’s not so much that the price of gold is going up, but rather the value of the dollar is slowly eroding before your eyes.

The One-Ounce American Gold Eagle

This episode’s feature gold bullion product is the one-ounce Gold American Eagle. Ken describes this beautiful bullion coin in vivid detail.

The Gold American Eagle is the most popular bullion coin globally and is available in different sizes and denominations. The one-ounce American Gold Eagle is the largest gold coin produced by the US Government.

Composed of 91.67 percent gold, the American Gold Eagle is 22 karats and has a slight brownish tint to its gold color because of its mix of 5.33 percent copper and 3 percent silver.

Created by the United States Mint in 1985, the American Gold Eagle program was a groundbreaking achievement that immediately captured the imagination and attention of the world.
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