In 1971 the US dollar was taken off the Gold Standard. The fiat currency experiment is now 51 years old and dying. Fiat currency by definition is money that has indirect market value or is given legal tender status by government fiat. Money here in the United States is called Federal Reserve Notes. Our money is backed by nothing but enormous debt and the promise by our government to repay that debt. If you believe that I have a nice piece of oceanfront property in Phoenix I would love to sell you at a great price. This debt will never be paid back. The debt is too enormous. This debt is toxic.
What is an investor to do? Stocks and bonds are falling tremendously. Real Estate is falling as the bubble is bigger than ever. Inflation is running rampant so our money is losing purchasing power by the day. Central banks are raising interest rates at a historic clip. The economy is under threat of being ruined. Our administration is lost and making things worse. Greed needs to be put on the back burner. Wealth preservation needs to be at the forefront. Considering that we are in the riskiest market environment of all time, there are many reasons to move paper assets into a Gold IRA.
A Gold IRA is a retirement account that holds physical precious metals. These precious metals are held at a non-banking system depository until you decide to take delivery of your precious metals through a distribution. The sideways move from paper market assets into a Gold IRA is not a taxable event. The Gold IRA is held and insured by a self-directed IRA company. The Gold IRA has been around since the 1990s, but few advisors or brokers recommend this type of diversification for wealth preservation. Few advisors would recommend moving assets out of the banking system into a hard asset that can’t be traded or churned to generate fees. Regardless of their opinion, the market is still filled with enormous risks and will play out over the next few years. The question is how you can preserve your wealth as the destruction unfolds. The answer is the Gold IRA.
Gold will stop the bleeding in your IRA
The first half loss of this year was historical for stocks and bonds. The indexes have held up better than individual stocks because they are skewed toward some big-name companies. Once these big-name NASDAQ companies give in to the tough economic conditions we now have, they will fall severely as well. It was 40 years of a low interest rate environment. This joyride is over. It was great while it lasted but it is now finished. An IRA filled with physical gold and silver will at least hold its value while this market implosion unfolds.
A Gold IRA will get your assets out of the banking system
We are headed towards a digital financial system. We are headed towards a system of total surveillance. The government wants to monitor all transactions in and out of all of our accounts. The Democrats think this will generate tax fees by the IRS against citizens. A Gold IRA is a way to transfer some of your paper assets out of this kind of system. It is our money that they want to run their system. This is a system of control. You do not have to have all of your assets in their system.
A banking crisis is inevitable
The banking system has been a huge beneficiary of fractional banking. Money that we deposit at banks can be leveraged by over nine times and compounded over and over again. This is all money that has been printed out of thin air. Where does the money come from to pay interest on this funny money? It does not exist. More money has to be printed to keep this fiat system going. It is a zero-sum game and is doomed to fail. Banking system liquidity is at an all-time low. Wouldn’t it be better to have a stockpile of gold and silver somewhere collecting dust rather than digital assets in an account that are just digits? A Gold IRA is one way to protect you from this banking crisis.
A Gold IRA has no third-party counter risk
Some hedge funds inevitably go belly up. The pension system in the UK is already on the brink of failure due to government bond exposure and rising rates. Why would other entities be immune to this? Many major Wall Street wirehouses sold the idea years ago to pension funds to invest heavily in government bonds. These pension funds need to make a certain amount each year and were forced to increase their risk. These returns are now becoming unattainable. What makes you so sure that some of these pension funds are already insolvent? Why would CalPERS be any different? I have no proof of this and I am not saying they are insolvent. What I am saying is where there is smoke there is fire. Folks, smoke is at an all-time high and a Gold IRA can be your fire extinguisher.
Leverage with derivatives is a serious problem
Debt here in the US in 1971 was about $1.7 trillion. This debt figure is comprised of household, government, and corporate debt. This number stands at over $90 trillion today. The expansion in this debt poses an enormous risk. Derivatives are contracts taken out to offset or leverage this risk. We wrote last week about the danger of these derivatives. Physical gold and silver in an IRA do not have this leverage at all. Precious metals represent a tangible asset and have no leverage. Some retirement funds need to be in this type of asset that is not in an environment of ungodly risk and leverage. This is another reason to have some retirement assets in a Gold IRA.
There are some significant tax advantages to the Gold IRA
Gold IRAs are held by a self-directed IRA custodian. These custodians are not coin dealers. They are incapable of valuing your coins and bars. If you take physical delivery of your Gold IRA assets and are only taxed at melt value, this can be a tremendous advantage. A Silver Eagle today can be liquidated for close to $30 a coin. The silver paper price you see every day is becoming more irrelevant than ever. It seems that the banking system is artificially forcing the price of paper gold and silver down for their benefit to take delivery of bars at a low price before the market explodes. Of course, time will tell if this is right, but in the meantime, there are ways to take advantage of this price suppression with the strategy of a Gold IRA and the eventual delivery of your assets through a physical in-kind distribution.
Listen folks eventually the last domino will fall. The market we have today is a total house of cards led by greedy politicians and bankers who have completely abused the financial system. If this system has worked to your benefit in any way to this point, you can still protect what you have. It matters what you have today, but it will matter more what you have left ten years from now. We are entering a financial system war with tremendous wealth destruction. Would you be better off bringing a water pistol to this war or a canon? The fiat system is weak and on its last leg. A Gold IRA is strong and will allow you to escape this wealth destruction with at least some of your wealth still intact. If you have an old or existing retirement account you can still do something about it before it possibly just disappears or buys a quarter of what you thought it would.