Editor’s Note: This article by Joshua Glawson from FEE, cross-posted with permission, was NOT written as a a “promoted post.” We are labeling it as such simply because we benefit when people take advantage of the advice Glawson offers by rolling over their retirement accounts into a self-direct IRA backed by physical precious metals through our partners at Genesis. Here’s Glawson’s article…
Governments recklessly erode citizens’ wealth, but there are ways to avoid being a victim of this scheme.
Because gold is honest money it is disliked by dishonest men.” – Ron Paul
Buying physical gold is a time-proven method of securing generational wealth, and a security measure often taken in times of economic turbulence. Gold investing has long been viewed as a hedge against inflation and a store of value against currencies. Throughout history, as coins and currency became debased, those who had more precious metals on-hand had many more options for purchasing what was needed and investing.
Investing in a gold currency, as economist F.A. Hayek suggested, also acts as competition to paper currency and any attempted coercive monopoly of currencies. When currencies are strictly controlled, the power of government is buttressed. Hayek specified, “[Monopoly of currency] has of course become a chief instrument for prevailing governmental policies and profoundly assisted the general growth of governmental power.”
According to Investopedia, currency debasement is intentionally lowering the currency’s value through various monetary and fiscal methods. In the past, debasement was associated with substituting precious metals with base metals such as using less gold or silver in the coins and replacing it with copper or nickel, while keeping the face value the same. Today, debasement primarily occurs by printing more money in the form of fiat currency, a process known as monetary inflation.
The reason governments typically initiate currency debasement is to extend government spending and purchasing power. Still, it comes at the expense of citizens who are eventually stuck with less wealth, higher costs, and lowered purchasing power. Currency debasement, as well as monetary inflation in general, tends toward price inflation. Simply put, currency debasement in the form of monetary inflation is legalized counterfeit.
Since the US began removing itself from the gold standard in 1933—and eventually removing that gold backing altogether in 1971—the value of the dollar has fallen significantly when compared to an ounce of gold. As of 2023, the value of US currency is being challenged as the dollar is slowly debased. The purchasing power of a dollar in 1913 would be worth around $30.22; a dollar in 1933 would be worth around $23; a dollar in 1970 would be worth $7.71; and, a dollar in 2003 would be worth $1.63.
How Does Gold Hedge Against Inflation?
Gold is a commodity valued and traded internationally. Gold is valued for many reasons including its aesthetic appreciation, limited supply, durability, imperishability, popularity, and industrial uses. Due to these reasons and more, gold has maintained its overall value throughout the millennia. When one country’s currency begins to slip or falter, gold is likely the best-shared commodity to transfer wealth between currencies of other countries while maintaining a greater appeal for investment. Especially so when some countries’ currencies are not accepted everywhere due to political conflict or discrepancies.
By measuring the rate of inflation, InflationTool demonstrates that from 1971 to 2023, the average inflation rate for the US dollar has been 3.93%, while the cumulative inflation rate has been a whopping 641.44%. In layperson’s terms, this means $100 in 1971 is now equivalent to$741.44, which represents a significant decrease in purchasing power.
As George Mason University professor of economics Lawrence White, states, “The inflation rate was only 0.1 percent over Britain’s 93 years on the classical gold standard. It was only 0.01 percent in the United States between gold resumption in 1879 and 1913.” Yet, because of failures of monetary policies by the Federal Reserve, and fiscal policies by Congress, the inflation rate today is much higher pushing above 6 percent with an average inflation rate from 1960 to 2023 averaging close to 5 percent.
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Is Gold Volatile?
Some economists, especially those with socialist and centralized planning tendencies, will suggest that gold prices are volatile. Their statements misrepresent gold as though the ‘volatility’ means gold is not as price sustainable as the dollar. Contrary to their sentiments, the price of gold is only considered volatile when compared to a currency such as the US dollar in relatively short terms. When gold is looked at through a lens of global values throughout the course of history, beyond a single currency, we see that it has maintained significant value, and when currencies fail it is gold that has helped people regain wealth. Comparing the global value of gold to the dollar, we see that the value of gold has remained intact overall.
In the US, gold in 1913 was $20.67; in 1933, it was around $32.32; in 1970, it was $38.90; in 2003 it was $417.25; and today, it is around $1800. According to Statista, from 1971 to 2022, gold had a return of 7.78 percent per year in USD terms.
Although the US government has continued to artificially fix, change, and influence the price of gold, the value of gold has remained superior to the dollar overall. This further indicates that gold is still a good hedge against inflation. Gold has outpaced inflation in the US in the long term, indicating that gold is not as volatile as the dollar in the long term.
Can Investing in Gold Improve the Dollar?
The fiat dollar of the US is what allows politicians, in conjunction with the Treasury and Federal Reserve, to arbitrarily print more dollars in order to fund nearly-endless wars, inflated welfare programs, and to deliver uncapped foreign aid. More printing of dollars tends to decrease the value of the other dollars in circulation, and this can lead to price inflation. Fiat simultaneously acts as a form of indirect slavery and secondhand theft once those dollars are spent, the same way counterfeiting does. If the dollar does not return to a gold standard to create a natural market-agreed value of the dollar with a more restricted supply, the dollar will likely continue to weaken as the incentives for these government programs and handouts are greater than the immediately perceived costs.
Even if the dollar does not return to a gold standard, having a significantly increasing number of people investing heavily in gold as opposed to treasury bonds, money market accounts, CDs, stocks, and the like, creates shifts in the incentives encouraging and pressuring other people to join in on the more sound investment of gold. The market sees the long-term stability and gains of those that do invest in gold, and people naturally tend to want to have the best return on investment. Gold is not a cure-all for inflation and deflation, rather it is a more stable long-term option than fiat.
Investing in gold and currencies that hold their value creates a challenge for the government’s monopoly over currency and its exploitation of that monopoly. Or, as Hayek said, “Just as the absence of competition has prevented the monopolist supplier of money from being subject to a salutary discipline, the power over money has also relieved governments of the necessity to keep their expenditure within their revenue.”
This article by Joshua Glawson was cross-posted with permission from FEE. You can roll over your retirement accounts into a self-direct IRA backed by physical precious metals through our partners at Genesis.
Five Things New “Preppers” Forget When Getting Ready for Bad Times Ahead
The preparedness community is growing faster than it has in decades. Even during peak times such as Y2K, the economic downturn of 2008, and Covid, the vast majority of Americans made sure they had plenty of toilet paper but didn’t really stockpile anything else.
Things have changed. There’s a growing anxiety in this presidential election year that has prompted more Americans to get prepared for crazy events in the future. Some of it is being driven by fearmongers, but there are valid concerns with the economy, food supply, pharmaceuticals, the energy grid, and mass rioting that have pushed average Americans into “prepper” mode.
There are degrees of preparedness. One does not have to be a full-blown “doomsday prepper” living off-grid in a secure Montana bunker in order to be ahead of the curve. In many ways, preparedness isn’t about being able to perfectly handle every conceivable situation. It’s about being less dependent on government for as long as possible. Those who have proper “preps” will not be waiting for FEMA to distribute emergency supplies to the desperate masses.
Below are five things people new to preparedness (and sometimes even those with experience) often forget as they get ready. All five are common sense notions that do not rely on doomsday in order to be useful. It may be nice to own a tank during the apocalypse but there’s not much you can do with it until things get really crazy. The recommendations below can have places in the lives of average Americans whether doomsday comes or not.
Note: The information provided by this publication or any related communications is for informational purposes only and should not be considered as financial advice. We do not provide personalized investment, financial, or legal advice.
Secured Wealth
Whether in the bank or held in a retirement account, most Americans feel that their life’s savings is relatively secure. At least they did until the last couple of years when de-banking, geopolitical turmoil, and the threat of Central Bank Digital Currencies reared their ugly heads.
It behooves Americans to diversify their holdings. If there’s a triggering event or series of events that cripple the financial systems or devalue the U.S. Dollar, wealth can evaporate quickly. To hedge against potential turmoil, many Americans are looking in two directions: Crypto and physical precious metals.
There are huge advantages to cryptocurrencies, but there are also inherent risks because “virtual” money can become challenging to spend. Add in the push by central banks and governments to regulate or even replace cryptocurrencies with their own versions they control and the risks amplify. There’s nothing wrong with cryptocurrencies today but things can change rapidly.
As for physical precious metals, many Americans pay cash to keep plenty on hand in their safe. Rolling over or transferring retirement accounts into self-directed IRAs is also a popular option, but there are caveats. It can often take weeks or even months to get the gold and silver shipped if the owner chooses to close their account. This is why Genesis Gold Group stands out. Their relationship with the depositories allows for rapid closure and shipping, often in less than 10 days from the time the account holder makes their move. This can come in handy if things appear to be heading south.
Lots of Potable Water
One of the biggest shocks that hit new preppers is understanding how much potable water they need in order to survive. Experts claim one gallon of water per person per day is necessary. Even the most conservative estimates put it at over half-a-gallon. That means that for a family of four, they’ll need around 120 gallons of water to survive for a month if the taps turn off and the stores empty out.
Being near a fresh water source, whether it’s a river, lake, or well, is a best practice among experienced preppers. It’s necessary to have a water filter as well, even if the taps are still working. Many refuse to drink tap water even when there is no emergency. Berkey was our previous favorite but they’re under attack from regulators so the Alexapure systems are solid replacements.
For those in the city or away from fresh water sources, storage is the best option. This can be challenging because proper water storage containers take up a lot of room and are difficult to move if the need arises. For “bug in” situations, having a larger container that stores hundreds or even thousands of gallons is better than stacking 1-5 gallon containers. Unfortunately, they won’t be easily transportable and they can cost a lot to install.
Water is critical. If chaos erupts and water infrastructure is compromised, having a large backup supply can be lifesaving.
Pharmaceuticals and Medical Supplies
There are multiple threats specific to the medical supply chain. With Chinese and Indian imports accounting for over 90% of pharmaceutical ingredients in the United States, deteriorating relations could make it impossible to get the medicines and antibiotics many of us need.
Stocking up many prescription medications can be hard. Doctors generally do not like to prescribe large batches of drugs even if they are shelf-stable for extended periods of time. It is a best practice to ask your doctor if they can prescribe a larger amount. Today, some are sympathetic to concerns about pharmacies running out or becoming inaccessible. Tell them your concerns. It’s worth a shot. The worst they can do is say no.
If your doctor is unwilling to help you stock up on medicines, then Jase Medical is a good alternative. Through telehealth, they can prescribe daily meds or antibiotics that are shipped to your door. As proponents of medical freedom, they empathize with those who want to have enough medical supplies on hand in case things go wrong.
Energy Sources
The vast majority of Americans are locked into the grid. This has proven to be a massive liability when the grid goes down. Unfortunately, there are no inexpensive remedies.
Those living off-grid had to either spend a lot of money or effort (or both) to get their alternative energy sources like solar set up. For those who do not want to go so far, it’s still a best practice to have backup power sources. Diesel generators and portable solar panels are the two most popular, and while they’re not inexpensive they are not out of reach of most Americans who are concerned about being without power for extended periods of time.
Natural gas is another necessity for many, but that’s far more challenging to replace. Having alternatives for heating and cooking that can be powered if gas and electric grids go down is important. Have a backup for items that require power such as manual can openers. If you’re stuck eating canned foods for a while and all you have is an electric opener, you’ll have problems.
Don’t Forget the Protein
When most think about “prepping,” they think about their food supply. More Americans are turning to gardening and homesteading as ways to produce their own food. Others are working with local farmers and ranchers to purchase directly from the sources. This is a good idea whether doomsday comes or not, but it’s particularly important if the food supply chain is broken.
Most grocery stores have about one to two weeks worth of food, as do most American households. Grocers rely heavily on truckers to receive their ongoing shipments. In a crisis, the current process can fail. It behooves Americans for multiple reasons to localize their food purchases as much as possible.
Long-term storage is another popular option. Canned foods, MREs, and freeze dried meals are selling out quickly even as prices rise. But one component that is conspicuously absent in shelf-stable food is high-quality protein. Most survival food companies offer low quality “protein buckets” or cans of meat, but they are often barely edible.
Prepper All-Naturals offers premium cuts of steak that have been cooked sous vide and freeze dried to give them a 25-year shelf life. They offer Ribeye, NY Strip, and Tenderloin among others.
Having buckets of beans and rice is a good start, but keeping a solid supply of high-quality protein isn’t just healthier. It can help a family maintain normalcy through crises.
Prepare Without Fear
With all the challenges we face as Americans today, it can be emotionally draining. Citizens are scared and there’s nothing irrational about their concerns. Being prepared and making lifestyle changes to secure necessities can go a long way toward overcoming the fears that plague us. We should hope and pray for the best but prepare for the worst. And if the worst does come, then knowing we did what we could to be ready for it will help us face those challenges with confidence.
