Perhaps the best way to protect one’s assets in this down economy is the time honored practice of buying gold bars. Men have been buying gold for thousands of years to become rich and to protect their assets. The stock market has become so unstable it almost impossible to predict. The Euro Zone debt problem is still making headlines and is unlikely to go away anytime soon. This means stocks will remain a mixed bag. Gold will go up.
Stocks, bonds, and printed money are all investments. However, they are backed by nothing real. Stocks and bonds have their place for investors, and we certainly need paper dollars to live our daily lives, but we should not depend on them. When you buy gold you are tapping into the ultimate safe haven.
Currently gold is trading at the very high spot price of $1700 per ounce. While this is down from its 2011 all time high of over $1900 per ounce it is indeed high. Even if gold suffers a price correction it will remain at a high market price. The same cannot be said about paper investments like stocks.
The Federal Reserve recently announced it will protect the American economy from the Europe’s debt problems. Some took this to mean that if Greece fails and Europe dips back into recession the FED could pump more printed money to stimulate the American economy. While this does indeed stimulate the economy it also raises prices. In other words, it devalues the dollar and causes inflation to rise. There is no better protector from inflation than gold.
Another European trouble spot that could affect the US economy is Portugal. This nation has already been bailed out by the European Union. However, Portugal has just seen their credit rating dropped to junk status. Even France has seen their credit rating dropped. These are troublesome signs for already nervous stock investors. The best way to be protected from this is to buy gold, before the spot price inevitably goes up even more.
In closing, the best way to protect one’s assets in a bad economy is to invest in gold. This precious metal offers a time honored way to protect assets. Gold has been used as a hedge for thousands of years and it still works. While stocks and dollars can lose virtually all of their value overnight gold always has value.