Three Reasons Why Gold and Silver Protect Us:
(1) Economic Conditions. There are cracks forming in our economy and what’s more troubling is that it looks like things could get even worse. I believe we’re in the eye of the storm or a better analogy would be the calm before the storm because we really haven’t seen hard times yet (For Prepping Tips Click Here). To me, there’s a lot of potential candidates as far as what could drive this: it could be the commercial real estate market, derivative contracts valued in the quadrillions (not a typo), more bank runs, or the credit card debt bubble popping. I lean to some sort of combination of events leading to a loss of confidence. Sadly, work ethic and American values have really been dying out. No one wants to work and the Fed govt favors large businesses over small. We saw precious metal demand jump in prior years. This was mainly due to people trying to make a quick buck.
(2) Gold and Silver protect us from bad decision making (5 Reasons to own gold and silver -read here). the first thing many think of here is inflation and money printing, and this is correct, but I want also to point out non-government institutions and their leaders can make horrible decisions.
For example, we see pensions running out of money all the time and Social Security (How We Can Fix Social Security-read here) is pretty much scheduled to begin running out of money in 2030’ s. And again, silver and gold that you hold is not something that can be mismanaged really.
One other group is investment firms and banks. They have made foolish decisions as they are incentivized to take risks because executives’ bonuses and stock options are tied to stock price. They think short term, never for the future. The bottom line here is that traditional banking needs to be conservative.
(3) Another way precious metals protect us is they are very liquid. And this is a very underrated benefit. Gold and silver are easy to sell and there is always a buyer for this asset. If I’ve got an ounce pf gold and I went to sell it, I can move it quickly and get either spot or slightly over. And I do believe other hard assets are worth owning too but sometimes they’re not as liquid. For example, land can take months to sell, and machinery can take years to get a fair price.
