Using a Gold IRA to Secure Your Retirement
The world economy has never been so interconnected and fragile. Governments around the world have experimented with the tax and spend policies of socialism for decades and have racked up unsustainable levels of public debt. Many are sounding the alarm bells at the prospects of a worldwide inflationary crisis. A gold IRA is one of the few ways to protect your retirement from the dangers of hyperinflation.
Inflation is often thought of as a period of increasing prices. However, the underlying cause is always the same, a devaluating of a government's currency due to failed central bank policies. Governments who run deficits that are too high to be financed by the public need central banks to print money into existence so they can continue to spend more and more money to support an unsustainably big government. This is why quantitative easing has become in vogue in the United States after the 2008 financial crisis. It is also why you will never see a true taper despite a lot of lip service paid to making money more tight. The government just cannot afford for the printing presses to stop.
In the midst of inflation, most retirement investments lose substantial value. Fixed income investments such as bonds get hit the worst as the current coupon rate often does not account for decreasing value of money in the future. In severe periods of hyperinflation, the secondary market in bonds can crash as with stocks.
While stocks have historically been viewed as a hedge against inflation, they also can crash severely due to business disruptions from consumers who have lost a significant amount of buying power. Stocks are also valued based on a discount rate tied to the risk free rate of interest. As interest rates jump in a hyperinflationary environment, stock valuations plummet.
Gold is one of the few asset prices that holds its value in a period of inflation. Gold has always been viewed as a canary in the coal mine when it comes to government monetary policy. It thus tends to appreciate much faster than the rate of prices in general. However, most retirement plans do not offer gold as an option. A gold IRA can allow you to invest in gold with retirement money, allowing you to hedge your portfolio against the ravages of inflation.
The world financial system could begin to implode any day due to imbalances in government finances. If you want to protect your hard earned savings from such an event, consider investing in a gold IRA.
The world economy has never been so interconnected and fragile. Governments around the world have experimented with the tax and spend policies of socialism for decades and have racked up unsustainable levels of public debt. Many are sounding the alarm bells at the prospects of a worldwide inflationary crisis. A gold IRA is one of the few ways to protect your retirement from the dangers of hyperinflation.
Inflation is often thought of as a period of increasing prices. However, the underlying cause is always the same, a devaluating of a government's currency due to failed central bank policies. Governments who run deficits that are too high to be financed by the public need central banks to print money into existence so they can continue to spend more and more money to support an unsustainably big government. This is why quantitative easing has become in vogue in the United States after the 2008 financial crisis. It is also why you will never see a true taper despite a lot of lip service paid to making money more tight. The government just cannot afford for the printing presses to stop.
In the midst of inflation, most retirement investments lose substantial value. Fixed income investments such as bonds get hit the worst as the current coupon rate often does not account for decreasing value of money in the future. In severe periods of hyperinflation, the secondary market in bonds can crash as with stocks.
While stocks have historically been viewed as a hedge against inflation, they also can crash severely due to business disruptions from consumers who have lost a significant amount of buying power. Stocks are also valued based on a discount rate tied to the risk free rate of interest. As interest rates jump in a hyperinflationary environment, stock valuations plummet.
Gold is one of the few asset prices that holds its value in a period of inflation. Gold has always been viewed as a canary in the coal mine when it comes to government monetary policy. It thus tends to appreciate much faster than the rate of prices in general. However, most retirement plans do not offer gold as an option. A gold IRA can allow you to invest in gold with retirement money, allowing you to hedge your portfolio against the ravages of inflation.
The world financial system could begin to implode any day due to imbalances in government finances. If you want to protect your hard earned savings from such an event, consider investing in a gold IRA.