1) First, one important reason to stack gold and silver that’s not talked about enough is a cyberattack or even an Electro Magnetic Pulse (7 Prepping tips for your family). We’ve never seen one a big scale really. Think about this scenario for a minute, the digital payment system is hacked at a few of the big banks- only cash or another form of payment can be accepted. Most people don’t carry cash, and the next logical solution are precious metals or something else of value. We know companies they’re cutting costs now and cybersecurity doesn’t always get the funding and attention it should.
Now, the thing is, if a company gets hacked and the attackers get customer data on a large scale it could spill over into different industries. Trust can start to erode quickly (Read Here what could speed up a Bank Run).
Now there are more critical systems and infrastructure that if it were to be hacked would be devastating. For example, the energy grid or our satellites. Most people are aware how delicate our energy grid is, but we depend so much on our satellites too and it could wipe out communication quickly.
I also should point out the dependency on too may smart devices as well. Not only phones, but also smart fridges, smart TVs, cameras and thermostats are very easy targets.
(2) The second reason to own metals right now is Economic Turmoil. With the fall of SVB in 2023 consumer confidence is still shaky. Delinquencies and defaults have been rising for quite some time across many products. We know credit card debt is at an all-time high, cars and houses are still way too expensive and commercial loans look bad with more workers wanting remote work.
The Fed will continue to have a tough decision. Either break the economy or pivot. I believe they will have to pivot since it is an election year and also all the criticism, they received for allowing the inflation to reach 9% (Why The CPI is flawed). Liquidity could become a big issue for these banks as well.
In my opinion the Fed needs to push up the reserve requirement. Banks have a moral hazard by getting to lend out so much of their deposits they keep on hand. If they get in trouble, they can go to the Fed for liquidity. Banks have been tightening lending standards which hurts the average consumer.
(3) Liquidity- There’s simply no other hard asset as liquid as gold and silver. There’s always a buyer as it retains its value. And this is really important for a lot of reasons and not just a SHTF scenario. But with what could be happening the next few months in the labor market. The Fed wants the unemployment rate (weaknesses in the unemployment rate) higher so we can expect layoffs will continue and could get much worse. Make no mistake, The Federal Reserve wants layoffs, so unemployment will increase, and they can have an excuse to lower rates. As one company cuts jobs, another competitor will follow to keep up.
Things could wind up very bad, however, I tend to believe we are a few years out from a serious economic crisis. Still though, I believe it’s important to start preparing for what could happen.
