Why everyone should have a bit of gold in case the unthinkable does happen to the world economy

The economy is something we always have to worry about and it seems that over the last couple of years things have been getting worse. 2008 sounds like a lifetime ago, but it wasn’t so long ago that the entire globe was feeling the aftermath of the U.S financial crisis. Things aren’t looking particularly great. The US National debt is above $21.6 trillion. It is expected to double in the next 8 years. And why should the rest of the world be worried? Because most economies and commodities are tethered to the U.S dollar. The U.S Greenback will continue to lose its value and the rest of the world will continue to feel the pain.

The U.S Federal Reserve has to raise the interest rate to service that debt. But how high can they raise the rate –  5%, 15%, 18%, more? The interest on current debt is $500 billion already. 6% interest on $21.6 trillion needs about $1.2 trillion! That sounds impossible for the government to pay. If the U.S cannot service its debt, the value of the dollar will be affected.

Debt is exploding everywhere. The financial and political elites know and understand the implications of rising debt. They have always known and that is why they have been buying gold and diversifying their investment portfolios. There has never been a better time for gold buyers to make a killing and this is why there are so many gold dealers offering to buy your old gold.

Things cannot continue as they have. The system can either implode on itself or hyper-inflate. If the dollar is devalued and bond markets would fall apart and the financial system that props the government would disappear. The government would have to implement martial law, blood would run on the streets. The US Economy cannot run without credit. People depend on it. it’s virtually impossible to imagine a world without cash dispensing machines or credit cards. Or a world where banks run out of money or refuse to take certain currency. Imagine America with all its big budget stores empty. Picture the desperation and anger that would ensue when nothing works, when even the trusted digital dollar can’t get you much because the things you need aren’t even available anymore.

People have imagined this, they are called “Preppers”. They have built underground bunkers stored with food and water to last them decades. They may come off as loony, alarmists with a few screws loose in their heads, but Remember Greece in 2010, look at what is happening in Venezuela, Puerto Rico, Turkey? Zimbabwe might be a third world country with a currency that was so devalued a Million Zim Dollar note could not buy you a packet of gum. Zimbabwe was once a thriving economy with a reputation of being the breadbasket of the world, now it is holding out an empty basket, hoping that other countries would throw them a couple of scraps.

We don’t know if this will happen to America, or Australia or Europe but it could. The fact that it has happened elsewhere should serve as a cautionary tale for all who value fiat currencies and the dollar. Sometimes we have to think of the unthinkable to put fail safe measures. A lot of people are realising the vulnerabilities of paper money and turning to gold and other precious metals. Gold has always been a safe haven and it really shouldn’t be something that rich people get to own. There are ways that ordinary folk can buy into gold and invest in the commodity. One way is buying gold jewellery, gold bullion coins or a gold bar or two before the price of gold goes too high and it is going higher. Gold buyers and gold dealers are located everywhere, even on the internet. They provide a valuable service of buying and selling gold, making the gold market accessible to all.

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