As the American founding fathers fled a tyrannical government, they established a nation set out to keep the power in the hands of the citizens. This was done for many reasons, among those reasons is the idea that absolute power will corrupt absolutely. Tensions came to a head in the summer of 1861 as the north and south drew the figurative line in the sand and prepared for the enviable bloody battle to come. President Lincoln with resources stretched thin was forced to do something that has never been seen before; print money that was not backed by precious metals (Gold/Silver/etc.).
This would be our first glimpse into the government overstepping their boundaries disguised as being in the “best interest of a unified nation”. Forwarding ahead to President Roosevelt and the great depression we see the confiscation of precious metals from all private citizens rendering private gold illegal. Why you ask? Because gold is an asset insurance policy, he was not thinking about individual rights rather the preservation of the country. This begs the question how did we get so far away from what our founding fathers envisioned?
Alan Greenspan the chairman of the Fed for 19 years through multiple presidents explained that when the gold standard has become obsolete there will be no way to protect the confiscation of wealth through government inflation. Wall Street executives have acknowledged that gold and precious metals are an asset class of their own, rendering gold an asset for protection against a tanking economy to protect investment portfolios.
Precious metals are money, all other forms of currency are simply credit or as Lloyd from Dumb and Dumber explains in confidence “That’s as good as money sir, that’s an I.O.U”, for those up on cult classic movie references you will understand the weight behind that statement. Taking a position in the stock market is great and diversifying your assets is a must, however, an investor must have a physical fall back plan: GOLD.
The fiat system that we currently are trading in is volatile to put it lightly. There is little to nothing that backs the investments people have in the market. What trips up the United States will render the rest of the world the beneficiaries. Though the United States is currently the leader in gold bullion stock they by no means have the market cornered. As China and Russia made it very clear in early 2016, they have all the intentions of closing the gap. According to an article written by David Marsh for Market Watch in 2016, we understand that world leaders are hedging their currencies against the American dollar through the medium of gold.
Out of control government spending, increasing trade deficits, and the United States being continually at war (which has a direct correlation to inflation) are all solid reasons to protect yourself and your family with an investment in gold. In such a volatile economic environment having negative beta investments will aid in the protection of a family legacy.