Bullion is money, because of its fundamental nature.As an investment, gold and other types of bullion typically are viewed as a financial asset that will maintain its value during times of political, social, or economic distress. As such, bullion can provide individual and institutional investors alike with a portfolio safety net against sharp downward spikes in complementary assets such as stocks and bonds. It is easy to see why investors all over the world are buying gold, silver, and other precious metals:
- Precious metals have always been, and likely will continue to be, a valued form of asset protection or “wealth insurance” in good times and bad.
- Over the last 5 years, the US dollar has lost nearly 50% of its value relative to the other major currencies, as the value of the U.S. Dollar declined, gold and silver prices have increased.
- The US budget and trade deficits are at all time highs and are moving higher.
- The Iraq war and potential for a war in Iran are continuing to increase our debt and cause uncertainty.
- The US economy is weak as depicted by very disappointing job numbers and other key economic data.
- China and India have a growing middle class that can for the first time in history buy gold and silver.
- An ounce of gold still purchases about as much crude oil as it did 50 years ago, the same cannot be said for US Dollars.
- Central banks are starting to diversify out of the dollar. As foreign governments look to avail themselves of more gold for their reserves, you should do the same.
- Unlike paper investments such as stocks, bonds, and currencies that can and have in the past become worthless, precious metals have intrinsic value and will always be of worth.
- In 1971 an oz. of gold cost $35. Today its over $900. Same dollar, same gold. The dollar has lost over 90% of its value relative to gold in that time. Those who have saved in paper dollars have been losing wealth. Save in something tangible, unprintable, natural, indestructible, and limited in supply.
- As the world continues toward war, terrorism, and economic uncertainty, it is imperative that everyone protect themselves by having at least some precious metals in their portfolio. Whether you are a large or small investor it makes sense, and with First National Bullion it is very easy to do.
This perfect storm is reminiscent of what happened in the late 70′s and early 80′s when the metals markets last ran and has sparked a major rally in the precious metals market again. It is important to keep in mind, past performance is never indicative of future results. When adjusted for inflation we are nowhere near the highs we saw in the early 80′s when gold went to $850. Today many investors don’t like what they see in the world financial markets and don’t believe stock prices will advance much further, nor do they think interest rates will stay this low down the road. Bonds could also be hit very hard in the near future as well, and with rates rising the real estate market is uncertain as well as fewer people will be able to afford to buy at the current record prices.
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