Precious Metals News

Embattled President Sets Stage for Gold Rally

President Sets Stage for Gold RallyIt’s a financial truth almost as old as the hills – or at least as old as the stock market. During times of uncertainty and political turmoil, stock prices will decline.
 
An investment in the stock market is tantamount to an investor’s stated belief in the future at any one time. If an investor buys a stock in a company, he believes that stock will rise, particularly because the economic conditions for that company (but especially those for that company’s product or service) are favorable.
 
The reverse is also true. If an investor sells a stock in a company, he believes the stock will decline, and that it’s not safe for his portfolio to hold on to the stock. And so, he sells it. In other words, public confidence will invariably have a dramatic effect on stocks.
 
It’s also true that the price of gold will rally during difficult times. Back in 1994, a report by Martin Armstrong showed that “every major rally in gold was linked to a crisis in confidence.” We witnessed this phenomenon at work “during the Panics of 1864, 1869, 1893, 1907, 1929, 1974, 1980 and 1987” when the public came to doubt the stability and durability of the government.
 
It makes sense when you think about it. If the public doubts the future and the ability of the government to govern, it will pull back on its positive bets for the future – in other words, on its purchase of stocks. The public will then cling to gold, the one hard asset it feels certain will hold value.
 
In more recent times, the Watergate scandal of the early 1970s is a prominent example of these financial market changes. Stocks and bonds skidded downward, and gold climbed dramatically.
 
This morning’s market activity reinforced this historic trend when stock indexes sold off dramatically for what amounts to the biggest losses in months. The Nasdaq moved down 1.8%, the S&P 500 and Dow Jones Industrial Average shed 1.3% of its value, and the Russell 2000 dropped 2.1%. These were the biggest market losses since March 21.
 
According to Investor’s Business Daily and other noted publications, investment analysts think that markets are reacting to the possibility that President Trump may have obstructed justice when he requested former FBI director James Comey to ditch his investigation of Michael T. Flynn. The former national security adviser is thought to have supplied the Russians with confidential U.S. information. While it would take a two -thirds majority in the senate to unseat Trump, observers note that the President will now have a difficult time getting his tax plan and other important legislation through congress.
 
Meanwhile, have you looked at your own retirement account? If you have stocks that are showing profits, you may want to sell at least some of your shares. You may also want to increase the quantity of physical gold you now possess. To do so just might prove the wisest investment decision you make all year.
 
For more information, call 800-777-6177 now, or request our FREE guide.

Posted in Alternative Assets, Bitcoin, Brexit, Economy, Gold, Investor, IRA & 401-K Accounts, Money, pension, Physical Gold, Precious Metals, Precious Metals News, Retirement, Trump, US Dollar | Comments Off

Blockchain – An Emerging Force in the New Gold Bull Market

If there’s one thing gold doesn’t suffer from, it’s a lack of fair-weather friends. Recently, the yellow metal has seen more of its share. Investment gurus love to flood the airwaves and Internet with praise for gold when it looks as though it’s about to take off, especially if the stock market is looking shaky or lackluster. But once it drops, these same gurus forget that gold’s principal driver has traditionally been its negative correlation to the U.S. dollar.
 
We’re seeing this now as gold appears to dawdle in the 1,220′s range. Professional investors and followers of the gold market realize that the shiny metal is at a market price chart-readers understand to be “support” – $1,224 per ounce.
 
Traditional forces which drive gold – a decline in the greenback, uncertainty in geopolitical affairs, and a pullback in stocks – can still come into play as gold gathers momentum for another push to the upside. But gold is about to encounter another force – one which will drive it to higher prices.
 
The digital currency bitcoin has taken the financial community by storm. Many have called it the contemporary “digital gold.” It’s clear that bitcoin is now an important source of value. Like gold, it’s portable, scarce, and divisible into units.
Fed Rate Increase
It’s hardly an exaggeration to say that bitcoin is on a tear. Its price has catapulted over 81% since the beginning of the year. Early this morning (5/12/17) in London, bitcoin was trading close to $1,824. Only two days before, on Tuesday, its price exceeded $1,700 for the first time. This past Monday, market capitalization for bitcoin rose to almost $30 billion.
 
Bitcoin is traded in blocks, which are time-stamped from block to block and are notably resistant to tampering. In our era of banking scams and delays, the safety and efficiency of blockchain technology has helped make bitcoin immensely successful as a currency.
 
Now, one of the world’s biggest providers of gold futures contracts, the CME group, has partnered with the U.K.’s Royal Mint to bring blockchain technology to the gold market. The partnership is introducing to the gold-trading marketplace a new gold-backed asset known as RMG or (Royal Mint Gold).
 
According to Sandra Ro, CME Group’s head of digitization, “RMG will allow instant transfers of gold to anyone anywhere in the world.” The Royal Mint will launch trading this summer, and plans to back up tradeable gold tokens with $1 billion.
 
A Singapore-based company, Digix, will be launching a similar project – one with gold-based assets that can be traded by private clients, as opposed to the Royal Mint project assets which will be traded exclusively by licensed dealers.
 
We are about to see exciting times in the gold market. Blockchain technology will provide efficiency and speed to the gold market – efficiency and speed that will be a match for any technology now seen in trading activity for stocks and bonds.
 
For more information, call 800-777-6177 now, or request our FREE guide.

Posted in Alternative Assets, Bitcoin, Economy, Global, Gold, Investor, IRA & 401-K Accounts, Money, pension, Physical Gold, Precious Metals, Precious Metals News, Retirement, Silver, US Dollar, World | Comments Off

Anticipation of Fed Rate Increase Causes Drop in Gold Price

Fed Rate IncreaseGold has been encountering some downside recently on the expectation that the Fed would be raising rates next month. Investors tend to move funds from the yellow metal toward interest-bearing vehicles during Fed rate increases. Their reasoning is that when you invest in gold, you receive no interest.
 
Gold prices had fallen more than 2% from $1,247 – the level of their 50-day moving average. But gold showed only its third gain of the month today, Wednesday, May 10 —it’s lowest in eight weeks on news of President’s firing of Federal Bureau of Investigation Director James Comey over what the Whitehouse characterized as his mis-handling of the investigation into Hillary Clinton’s emails. Democrats and other opponents of the President feel that the congressional investigation into Russia’s interference in the presidential election is actually what’s at stake in Comey’s dismissal.
 
Chief market analyst at Think Markets, Naeem Aslam, claims that investors look upon this political development as a possible hedging opportunity. In other words, should the stock market take a big hit on what could become the biggest negative presidential news since Richard Nixon’s resignation over the Watergate scandal, gold could well resume its safe-haven status.
 
Silver followed suit with a market jump of $.14 to $16.207 per ounce. Just yesterday, the white metal had closed at $16.067 – its lowest closing price of the year.
 
Make no mistake. Political turmoil is almost always a good bet for the upside of precious metals, and gold in particular. On Friday, April 7, for instance, when the US fired more than 50 Tomahawk missiles at a Syrian airfield from warships in the Mediterranean, gold and silver encountered a dramatic bump in price.
 
In the last 15 years, government retail sales have catapulted at an astonishing pace –over two and a half times the levels seen in 2001.
And given the uncertainty of forthcoming decisions in the White House, and a surprise Senate modification of the Health-Care bill handed to them by the House of Representatives, we’re likely to see other surprises in the near future.
 
An investor can best prepare for such surprises by purchasing gold. Regardless of a raise in interest rates which ordinarily stimulate lending, and therefore business growth, political unrest is a drag on the economy. And gold represents your best protection against losses in your paper assets, and the depletion of your retirement account.
 
For more information, call 800-777-6177 now, or request our FREE guide.

Posted in Alternative Assets, Brexit, China, Economy, Gold, Investor, IRA & 401-K Accounts, Money, pension, Physical Gold, Precious Metals, Precious Metals News, Retirement, Stocks, Trump, US Dollar, World | Comments Off

Will You Have Enough Money to Retire?

Are you about to retire soon? Are you financially prepared for what should and could well be the most rewarding phase of your life? If you can confidently answer “yes” to these questions, then congratulations!
 
Consider yourself fortunate. Last year, the Money division of Time.com published an article entitled “1 in 3 Americans Has Saved $0 for Retirement.” Yes, you read it right “0” or zero –in other words, zilch, bupkiss, nada.
Money to Retire
One wonders what on earth happened. What have these people been thinking – long-time employees who rode themselves all the way to the cliff of retirement age with absolutely nothing to show for it.
 
Well, things happened along the way: “credit card debt, student loan debt, low wages, the need to save for a child’s college education, and the list goes on,” according to Money columnist Cameron Huddleston.
 
It gets worse. GobankingRates surveyed groups of different ages – Millennials, Generation Xers, Baby Boomers and Seniors – and discovered that many are seriously behind in their retirement plans. In fact, 56% of all Americans have less than $10,000 saved for retirement. The problem is worse for women. Two-thirds of women (63%) say they have no savings, or less than $10,000 in retirement savings, compared with a little more than half (52%) of men.
 
What about Social Security, you might ask? Don’t bet on it. Unless Congress acts on the problem, funding for Social Security could run out by 2034. Sure, payroll taxes could pick up the shortfall – but only to a point. The program will still be able to pay 79% of promised benefits.
 
What, then, can you do if you know you’re among the unlucky majority of Americans who has insufficient means to retire?
 
The first thing you should consider is very difficult and very unpopular. Lower your standard of living. Eat out less, buy a smaller car, take less expensive vacations.
 
Another thing you must do is to pay down on your credit card debt. The longer you carry that debt, the longer the interest payments can eat into your retirement savings.
 
Also, most financial planners suggest that employees about to retire should delay taking social security to maximize their benefit payments. This is not always that easy to do, however. It’s like asking “how long am I going to live?”
But as Investopedia points out:
 
“The answer depends on which age you file for the social security benefits. For example, assume your full retirement age (FRA) is 66, and the maximum benefit for the FRA in 2016 is $2,639 per mo. Say, if you’re 62 & contemplate to file for an early benefit, you may only get 75% of the full benefit, which is $1,979/mo. On the other hand, if you delay the claim to age 70, you will earn 132% increase, which is $3,483/mo.”
 
Another thing you should seriously think about is to delay retiring, especially if you’re in good health. Retirement is not always everything it’s cracked up to be. Yes, you can cut down on burdensome commuting, and, yes, you can enjoy the benefit of not having to put up with a difficult employer. But if you enjoy your work and the people with whom you work, there’s no reason why you shouldn’t take advantage of a good opportunity to sock away additional income.
 
Finally, invest in gold – physical gold. You’re going to need protection against inflation when you no longer have pay raises to offset the increasing cost of living. Gold is still the very best way to protect your retirement account against inflation.
 
For more information, call 800-777-6177 now, or request our FREE guide.

Posted in Bitcoin, Economy, Global, Gold, Investor, IRA & 401-K Accounts, Physical Gold, Precious Metals, Precious Metals News, Retirement, US Dollar, World | Comments Off

Dollar Devaluation or a Global Currency War?

Is a global currency war in our future?
 
Recently, President Trump and Peter Navarro, head of the National Trade Council, noticed that the Japanese Yen, Chinese Yuan and Euro were significantly undervalued. Trump and Navarro speculated that this was intentional — part of a currency war on the global stage and against the United States in particular.
 
Are Trump’s fears justified? If so, what does it mean for the American economy and what does it mean for gold?
 Dollar Devaluation
What Is a Global Currency War?
 
A currency war is a situation where a country intentionally allows its currency to devalue. The effect is that it bolsters foreign investment in the country and reduces the likelihood that natives will spend their money elsewhere. A weak yen relative to the dollar, means dollars have much more buying power in Japan, so Americans are more likely to come to Japan to spend money, while the Japanese are likely to stay and spend money where they are.
 
This can bolster a country domestically, but by the same token, it hurts the opposing country’s desire to increase imports vs. exports and boost the domestic economy.
 
What Are the Pros and Cons of a Currency War?
 
Generally, countries prefer to keep their currency strong. A strong currency boosts confidence in the nation, both externally and internally, and in itself can lead to a healthy economy. In contrast, a currency war can devalue a country’s currency so much that it leaves them poverty-stricken before any significant change comes.
 
In fact, this is partially what happened to the United States in the Great Depression of the 1930′s.
 
How Will Trump Respond to Threats of a Currency War?
 
Some might suspect that the correct response would be to devalue the dollar, figuring the dollar can lose some buying power and still remain strong while reducing the impact of currency devaluation by other countries. But Trump is no ordinary President, and with his reputation for not backing down, devaluing the dollar doesn’t seem to be in character.
 
Early signs suggest that this is the case. Trump’s first salvo in this currency war has been to sign the “Buy American, Hire American” executive order, reducing the number of guest worker visas the U.S. issues and requiring agencies to buy goods and services internally. This suggests Trump’s attitude towards the threat of currency war is, “go ahead, I dare you,” which is fairly consistent with his behavior so far.
 
What Does All This Mean for Gold?
 
As it happens, whether Trump moves to devalue the dollar or not, gold can benefit. Gold’s greatest value is in its stability. No matter how different currencies in the world fluctuate, gold remains gold — and the more uncertainty there is in other markets, the better gold looks.
 
Therefore, although the future is impossible to predict, one might expect gold to rise both as a hedge against a falling dollar and a haven against the fallout of Trump going head-to-head with other global currencies.
 
Either way, gold seems to be a smart choice when it comes to investing today.
 
Protecting Your Future With Gold
 
If you’re interested in protecting your future with gold, Fortress Gold Group can help. We can move your retirement account into a gold-backed IRA, which works just like a traditional IRA except it’s supported by the power of gold.
 
Give our precious metals specialists a call at 1-800-777-6177 or request more information now.

Posted in Alternative Assets, Economy, Gold, Inflation, Investor, IRA & 401-K Accounts, Money, Physical Gold, Precious Metals, Precious Metals News, Stocks, US Dollar, World | Comments Off

Brexit and Trump Election Panic: Going for the Gold

BrexitThe year 2016 had many investors and financial analysts buzzing about the future of gold, with many thinking that future was very bright. Two major events happened that year that many predicted would be a serious driver of gold prices: Brexit and the Trump election.
 
Brexit — the decision by the United Kingdom to leave the European Union — shocked the world and even left many residents of the U.K. flabbergasted. Those who were against it could not understand why Britain would want to leave the economic security of the European Union, and even many who voted for it were surprised and even concerned that the referendum to leave had actually passed.
 
As shocked as the world and half of Britain was by Brexit, the world and half of America were equally shocked by the election of Donald Trump for President of the United States over Hillary Clinton. Trump, the least-qualified man ever to run for President in terms of political experience, went up against Clinton, who, as a former First Lady, U.S. Senator and Secretary of State, had probably the most impressive Presidential candidate resume in recent history.
 
Trump, riding a “populist” movement despite being a billionaire with no history of public service, won the day. The polls and most pundits predicted Trump would prove little threat to Clinton, so his victory turned the world on its ear.
 
The Predictions
 
Some people thought these bold moves might embolden a new entrepreneurial spirit and inspire confidence in the stock market, potentially hurting the value of gold, but most suspected the opposite: That the inherent uncertainty of these two events would send people running into the secure arms of gold.
 
The Effects of Brexit and Trump on Gold
 
So far, it looks like the latter group was right on the money. Over 2016, demand for gold increased by two percent, representing 92.9 tons, bringing gold to a three-year-high of 4,308.7 tons. With an added 532 tons, it was the second-best year ever for ETF inflows, according to the latest Gold Demand Trends report.
 
By September of 2016, gold had jumped 25 percent. It settled down a bit, but still finished up 8 percent on the year, thrilling savvy gold investors who were confident that betting on gold was the right play in this new, uncertain world.
 
Another great sign was that demand from China for gold rose as well — as high as 25 percent — in response to the weakening of their own currency, the yuan, against the dollar.
 
The Future of Gold in the Post-Brexit/Trump Universe
 
The full effects of Brexit and the Trump election have not even gotten close to being felt yet. Britain is not even officially scheduled to leave the European Union until 2019, and in only a few months as President, Trump has upset several world leaders, bombed Syria and some think may be pushing America to the brink of war with North Korea.
If there ever was a time of great uncertainty in the world, this is it — and gold is reflecting that truth. Gold prices are up 5.29 percent since the beginning of 2017 and recently hit an 11-week high. While some market corrections may be in store, the future of gold does look very bright indeed.
 
Investing in the Future With Gold and Fortress Gold Group
 
It’s not too late to get in on the benefits of owning gold. Fortress Gold Group, the #1 Gold Firm in America according to the Inc. 500, can help. To learn more about investing in gold, request our FREE guide of Fortress Gold Group today at 800-777-6177.

Posted in Brexit, Economy, Global, Gold, Inflation, Investor, IRA & 401-K Accounts, Money, Physical Gold, Precious Metals, Precious Metals News, Retirement, Silver, Stocks, Trump, US Dollar, World | Comments Off

What the 20 Trillion Dollar National Debt Means for Investors

National DebtHard as it may be to believe, the United States is now carrying a debt of 20 trillion dollars. How did this happen, and what is President Trump going to do about it, if anything? What does this debt mean for investors, and for precious metal investing in particular?
 
How Did We Get Here?
 
We got into this debt the same way anyone gets into debt: By spending above our means. In the case of the country, this overspending has been on a much grander scale, but the idea is the same. Whether it’s extravagant military spending or misdirected corporate subsidies, the United States has budgeted poorly — and because the consequences have been few and far between, each President seems to feel free to spend more than the last.
 
Some point to Nixon’s removal of the gold standard in 1971 as the precursor to the current crisis. Back then, you could exchange dollars for actual gold, so the amount of dollars was controlled by the amount of available gold.
 
Now, we can print as much money as we want, but we have a “debt ceiling,” which is basically a credit limit. But what do you think would happen if you were in charge of deciding whether or not to raise your own credit limit? You guessed it — you’d keep raising it and raising it until you were 20 trillion dollars in debt.
 
What Happens Next?
 
All indications suggest Trump may just go ahead and hit the gas. His latest budget proposal asks for $52 billion in military spending and he’s looking for another billion to build his wall. He’s paying for some of it by cutting funding to agencies and programs popular with progressives, environmentalists, educators, healthcare professionals and consumer watchdog groups — like the EPA and funding for public education — but it looks like he’s planning to spend a lot more than he saves.
 
The result is that he’s likely to come up against that debt ceiling sooner rather than later.
 
What Do the Experts Say?
 
Some experts think that when the time comes, Trump will demand that Congress raise the debt ceiling or face a government shutdown. This situation has happened before, but every time it does, it destabilizes the world economy.
 
Furthermore, while the debt ceiling is in play, chaos can reign. The government could shut down for a while as they come up with the solution, and that solution is typically an agreement to raise the debt ceiling in exchange for a lot of concessions, like chunks of the newly available credit going to the states of the members of Congress who voted for it.
 
What Does This Mean for Investors?
 
If Trump lets the deficit continue to rise, and if he has to force a vote on raising the debt ceiling, it will probably reduce consumer confidence in an already uncertain administration. Based on past events, this is likely to be very good for gold. One of the great benefits of gold is that it acts as a hedge against unstable markets. Even if dollars dramatically lose their value due to a massive national debt, gold will remain gold and will still be valuable.
 
You can’t just turn your dollars in for gold anymore — you’ve got to buy it at wherever the market sets the price, which may well go higher and higher as confidence in this administration’s economic policies waver.
 
How Can You Take Advantage of the Debt Situation?
 
None of us want the country to be 20 trillion dollars or more in debt. But since you’re not in charge of the national budget, all you can do is take advantage of the situation. To find out how buying precious metals can help you do that.
 
For more information, call 800-777-6177 now, or request our FREE guide.

Posted in Alternative Assets, Economy, Global, Gold, Inflation, Investor, IRA & 401-K Accounts, Money, pension, Physical Gold, Precious Metals, Precious Metals News, Retirement, Silver, Stocks, Trump, US Dollar, World | Comments Off

Don’t Wait to Buy Gold

GoldFrequently, you’ll hear professional traders and investors say they’re going to buy gold when it drops to a certain price. Less frequently, you’ll hear them comment they’ll enter the gold market when it reaches a certain price on the way up.
 
In the first instance, traders and investors are waiting to buy gold in an attempt to maximize profits. They’re trading gold the same way (they hope) they trade stocks. By analyzing technical and fundamental indicators, they’ll hook on to the yellow metal when it reaches a bottom.
 
In the second instance, they’re jumping on to a moving train, so to speak. The idea here is, when gold exhibits clear signs of an upward trend, smart investors will be wise to hook into that trend. So these traders look for gold to push past an established price point. Once past that point (that resistance), gold will be well on its way.
 
The flip side of this moving-train approach is, just as with a stock, and despite fundamental and technical indicators, gold could decline unexpectedly rather than take off for the stratosphere. More often than you might imagine, the best professional guess about the direction any commodity or stock will take is simply a wrong guess.
 
Think of gold as a profit-making entity, and concern yourself with its upward or downward trend, invest in the yellow metal for its potential as a hedging commodity or insurance policy for your retirement account.
 
Be mindful of its upward or downward trend, to be sure. But don’t be a slave to that trend. Most every time is a good way to invest in gold – physical gold. Keep in mind that gold possesses a natural negative correlation to the stock market. With notable exceptions, if the stock market moves up, gold will move down or hold firm. And if the stock market moves down, gold will move up.
 
This negative correlation is precisely why gold is widely regarded as a safe haven. On April 2, 2017, for instance, US auto sales are down. Both Ford and General Motors show weaker-than-anticipated sales. Ford shares dropped to a 21-month low, and GM’s April sales declined 5.8%.
 
Investors with sufficient physical gold in their portfolio will be well-equipped to weather this financial storm. Because, if auto sales continue to move down, and the economy at large suffers as a result, investors will most certainly move funds over to a safe haven like gold.
 
If you’re holding gold, then, you’re already in a good position. Don’t wait to buy gold; rather, buy gold and wait.
 
For more information, call 800-777-6177 now, or request our FREE guide.

Posted in Alternative Assets, Economy, Gold, Investor, IRA & 401-K Accounts, Money, Physical Gold, Precious Metals, Precious Metals News, Retirement, Silver, Stocks, Trump, US Dollar, World | Comments Off

Trump’s Bold Tax Plan – Good or Bad for Gold?

Trump and Tax Plan
Once again, Donald Trump has embroiled himself in controversy that strikes at the heart of Americans. His plan is to slash taxes, but not just for the rich, as his critics had anticipated. The President has put forth a proposal that will profoundly affect many individuals as well as almost all corporations. He has boldly suggested his proposal will stimulate GDP growth to the tune of a whopping four percent.
 
Also, Trump is looking to create millions of jobs, simplify what has become an onerous tax code, provide tax relief to American families (primarily middle-income families), and lower the business tax rate to one of the lowest in the world (it’s currently one of the highest).
 
At a White House press briefing on Wednesday, April 26, Treasury Secretary Steve Mnuchin and National Economic Council Chair Gary Cohn announced President Trump’s tax reform plan. In broad strokes, here is the President’s plan.
 
• For individuals, it will reduce the number of tax brackets from seven to three and cut the marginal tax rate from 39.6 to 35 percent.
 
• Double the standard deduction, and eliminate almost all tax breaks except for home ownership and charitable deductions.
 
• Abolish the Alternative Minimum Tax, the Obamacare tax on investment income, and the estate tax.
 
• For businesses, the plan proposes to cut the corporate tax rate to 15 percent.
 
Needless to say, a comprehensive tax plan like this will draw its share of critics and supporters. The publisher Time, for instance, applauds the reduction of the nation’s tax burden by about $12 trillion over ten years. They reason too that the ambitious reduction of the corporate tax rate will boost America’s competitiveness.
 
On the other hand, the Tax Policy Center bemoans that the President’s plan will add trillions to our national debt over the next ten years. TPC blogger Howard Gleckman writes, “This is not reform. It is, rather, an enormous tax cut.”
 
How will the Trump tax plan, if enacted, affect gold? Will it drive the price of the yellow metal up? Or will it cause it to decline?
 
There seems little doubt that the stock market will soar, provided Congress clears the president’s proposal with minimum modification. Given a strong reduction in taxes, American corporations could grab at an opportunity to develop and grow. We’d soon see the results spelled out in a Dow Jones Industrial Average (DJIA) that could well fly up from its present level of almost 21,000 to 30,000 in the not-too-distant future.
 
Such market activity suggests investors were then becoming less risk averse and were moving from safe-haven assets like gold in favor of paper assets like stocks. At that point, of course, we could easily see a move down in gold.
 
This would be for only a small window of time. As Marc Faber, publisher of the Gloom, Boom & Doom Report, has continually pointed out, asset prices have been “grossly inflated.”
 
While we’ve seen some dramatic corrections in the stock market in the last year, the rapidly rising prices of equities fueled by an enormous federal deficit unleashed by President Trump’s tax plan are a natural invitation to a precipitous rush to gold as a safe haven.
 
For all of the changes we now face, you can be certain of one thing. Gold will continue to provide protection and security for retirement accounts in a wavering stock market.
 
For more information, call 800-777-6177 now, or request our FREE guide.

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Venezuela and the Horrific Nightmare of Inflation


When Columbus arrived in Venezuela on his way to what is now America, he dubbed the country “The Land of Grace” (Isla de Gracia). He became breathless at what he discovered. He thought he had reached Paradise. Columbus devoted two weeks exploring the Río Orinoco delta. He became entranced with the ample source of fresh water and the pearl ornaments of the native population. He believed he had discovered the Garden of Eden.
 
But it was Amerigo Vespucci, in 1499, who gave Venezuela its name, one year after Columbus had explored the Orinoco River Delta. When the Florentine explorer sailed along the coast of South America and reached Lake Maracaibo, and noticed homes on stilts along the shore, he couldn’t help but think of Venice, and thus named the region Venezuela, or “Little Venice.”
 
Unfortunately, the sixth largest country in South America, though it retains its beauty and biodiversity, no longer can be thought of as a charming place for city dwellers to carve out a life. The Land of Grace has turned into a hell on earth.
 
The residents are having a difficult time finding food, clothing, medical supplies, and even toilet paper. Venezuela has now become besieged by rampant crime, a government dictatorship, and inflation that’s out of control.
Venezuela Inflation
In 2016, the country’s inflation hit 800 per cent, and its gross domestic product (GDP) contracted 18.6 percent. Four out of five households are now officially in poverty, twice the rate that enveloped the economy when its current corrupt and inept leader, Nicolás Maduro, came into power in 2013.
 
The fundamental reason for Venezuela’s economic disaster can be traced to its over-reliance on its oil exports.
 
When global oil prices toppled in 2014 from $100 a barrel to $21.50 a barrel, Venezuela found itself in dire straits. The country became plagued by enormous oil surpluses. What was once its economic advantage rapidly had become its economic curse. Lacking other resources, government leaders discovered that oil surpluses did not convert to food, medical supplies, toilet paper, or domestic stability.
 
Venezuela now found itself trapped by the “resource curse” known as the Dutch disease. The phrase came into fashion in 1977 when the Dutch economy precipitously declined on the tail of the Netherlands discovery of natural gas reserves in 1959. The country had come to suffer as a result of relying too heavily on one resource – natural gas – and on an overvaluation of the Dutch currency.
 
Unfortunately, the Dutch disease didn’t translate into an economic lesson for Venezuela. In 2013, that country’s $143 billion in exports consisted of $139 billion in crude and refined petroleum. So it comes as no surprise that when world oil prices plummeted, Venezuela’s economy collapsed.
 
As things stand, Venezuela does not have enough money to import food and medicine, its shopping lines have become longer and longer, whereupon shoppers ultimately discover stores’ shelves have become empty.
 
Inflation keeps rising, and the bolivar, Venezuela’s currency, is devaluing. One bolivar is now worth 0.100127 US dollars. And there’s no stopping of the currency slide in sight. Needless to say, the country is now caught in a nightmare of crime and political corruption.
 
Is there a lesson we can learn from Venezuela’s experience with inflation? I think so. While here in the United States, we’re nowhere close to that nation’s economic tragedy, we’d be well advised to keep in mind that fiat currency could very well go poof in our lifetime.
 
Also, we don’t accumulate wealth, per se, by just accumulating dollars. It’s important to accumulate hard assets as well. And the best of the hard assets, in terms of its history and portability, remains physical gold.
 
For more information, call 800-777-6177 now or request our FREE guide today.

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