What The Numbers Are Saying About Investing In Gold
Gold is a store of value. It preserves your purchasing power when paper money is not. Recall that in 1971 the US dollar was taken off the gold standard. Since then and the “provisional” movement, our money has been backed by nothing but promise. It was the government’s promise to pay off all its debts. The US government cannot pay off all of its debts and neither can the rest of the world.
If the markets are not doing well, the first solution that central banks consider is to print money. See what the US Fed is doing with the fiat currency:
It took the Federal Reserve 80 years to print its first trillion. Then it took 18 years to print the second trillion, then 5 years to print the third, four years to print the fifth, and then in 2020 it took four months to print the fifth trillion. This printing of money and debt has consequences and debts that can no longer be repaid. Gradually, the trust in currency is eroding and this is becoming visible to everyone and bullion dealers are seeing an upswing in the amount of investors acquiring gold for their wealth and financial stability. The death of the US dollar is imminent.
Central banks print like drunken sailors
Inflation has historically been isolated to one geographic area. The world is currently experiencing inflation. Central bankers are abusing their power and printing new money. Now they are stuck. They cannot continue to raise their interest rates without affecting the economy, the economy and markets will collapse. As they print and collect more, inflation will rise and fiat money will die and become worthless.
Gold is for kings. It represents wealth. However, you don’t have to be a king to buy gold.
Fiat currencies continue to lose value
People see what it’s like to lose money in real time. Inflation is more than 8%. Every major fiat currency has lost over 97% of its value against gold since the 70s. Remember the time when a man could support a family with an average salary, his wife would stay home and take care of the children and the family would still be able to send to kids to college.
Stocks are still historically expensive compared to gold
The ratio of the Dow to gold is rarely discussed. Does anyone remember when the prices of gold and the Dow were almost equal? In 1915 the ratio was 2.86, in 1932 it was 2.09; in 1980 the Dow was 1.3 times the price of gold. In 2011, the ratio reached 6.74, in 2020 it was 14.5, and now, down 20%, and now it is 17 times higher than the gold price. Is it so crazy to see the Dow and the price of gold the same as 5000 or 10000? The numbers suggest a weak return for the Dow Jones Industrial Average and a big return for gold sometime in the not-too-distant future.
So what should we do when we see money falling? You should have something tangible and valuable. Go to bullion dealers near you to find out how you can invest more of your money in gold and keep all the wealth you have out of the financial system. You can eliminate the idea that you will wake up one morning and realize that everything is gone because of one country that decided to invade another country one night.
The price of gold is still undervalued considering all the paper money devaluations we have seen and will see in the future. How many more trillions will need to be printed and spent before you wake up to the reality that currency has no real value? The numbers say you should be earning more gold now than ever before. The only type of gold that can maneuver this swamp is the gold you’re holding.