Why Bullion?
There are a lot of reasons why you should own physical bullion as a storage of wealth. We will do our best to list the major reasons because the list can go on and on. Some basic economics definitions are needed to help fully understand this concept.
Inflation: Defined as a rise in prices over a given time. Additionally, defined as a loss in purchasing power. Furthermore buying less products with the same amount of money. Using an example a $1.00 coffee at the gas station in 2020 now costs a $1.29 in 2023. This means the coffee’s price went up 29% over a 3 year period. Or spoken differently your $1 is now worth .71 cents of purchasing power.
Money Supply: The money supply simply put is all the money in circulation at this time. For example coins, checking accounts, savings accounts, cash, and etc.
The Federal Reserve(Fed): The Fed’s responsibilities are to set the interest rates, manage the money supply, and help stabilize financial markets. If you ask the Fed what they are supposed to they will say keep inflation around 2% and aim for full employment.
How does all this relate to money?
The basics theory of those economic terms above are this. When the money supply goes up so does inflation, and vice versa. The money supply grows when the Fed creates more money out of thin air. For instance, did you know that the money supply in February of 2020 was $15.5 Trillion. Then in February of 2022 it was $21.6 Trillion. This is a 39.35% increase in the money supply. That is why inflation has been so great the past few years. So now why, and how does this relate to precious metals?
Why you need to be in Bullion vs Cash!
- SAFE HAVEN-During times of high inflation precious metals have been called safe haven assets. Safe haven assets can be defined as an investment that retains or increases in value in times of uncertainty. Instead of being in stocks, bonds, real estate, or cash. People convert their money to precious metals.
- PURCHASING POWER– Did you know that since 1900 the Dollar has lost 97% of its value? If you had $1,000,000 in 1900 it would be worth about $30,000 today. If you had $1,000,000 in GOLD in 1900 it would be worth about $96,758,587.30 in today’s value. To say it holds its value is an understatement.
- GOLD STANDARD-When other countries start backing their currency with GOLD the value of your physical GOLD & SILVER will be exponential. All others countries in the world recognize GOLD & SILVER with value. Instead of exchanging for U.S. Dollars they will give you their currency form. What does this mean? The GOLD STANDARD used to be where you could go to any bank and exchange your 1 OZ GOLD COIN for a $20 Bill or vice versa. Same for smaller coins. In 1973 Richard Nixon took us after the GOLD STANDARD. This was a terrible mistake. Why does this matter? This means our currency is not backed by a physical asset. Furthermore, this makes inflation more rampant. Our currency is currently backed by the full faith of the government and nothing else. When countries start making their currencies GOLD backed. The U.S. Dollar will lose substantial value. Right now there is a major push to create a new GOLD backed currency called BRICS. This stands for Brazil, Russia, India, China, South Africa, Saudi Arabia, and other countries. If they create this currency, it will dethrone the U.S. Dollar as the World Reserve Currency. Instead of our currency being the strongest in the world. It means everything would cost more to buy internationally.
- CBDC (Central Bank Digital Currency)- The Fed has now created their own cryptocurrency called a Fed Coin. The first problem is it is overseen by a central bank. Unlike bitcoin which is decentralized. With a central bank overwatching they can freeze your account with the click of a button. They could do it for any reason at all. Maybe your political affiliation does not match their it does not matter. Physical precious metals are in your hand and present. They will always have value and be a way for you to barter.
What are you talking about?
Check these links and articles out!
Safe Haven
https://www.investopedia.com/terms/s/safe-haven.asp
Purchasing Power
Gold Standard
https://www.investopedia.com/ask/answers/09/gold-standard.asp
CBDC (Central Bank Digital Currency)
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