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It is easy to see why investors all over the world are buying gold, silver, and other precious metals: Precious metals have always been, and likely will continue to be, a valued form of asset protection or "wealth insurance" in good times and bad.Over the last 5 years, the US dollar has lost nearly 50% of its value relative to the other major currencies, as the value of the U.S. Dollar declined, gold and silver prices have increased.The US budget and trade deficits are at all time highs and are moving higher.The Iraq war and potential for a war in Iran are continuing to increase our debt and cause uncertainty.The US economy is weak as depicted by very disappointing job numbers and other key economic data.China and India have a growing middle class that can for the first time in history buy gold and silver.An ounce of gold still purchases about as much crude oil as it did 50 years ago, the same cannot be said for US Dollars.Central banks are starting to diversify out of the dollar. As foreign governments look to avail themselves of more gold for their reserves, you should do the same.Unlike paper investments such as stocks, bonds, and currencies that can and have in the past become worthless, precious metals have intrinsic value and will always be of worth.In 1971 an oz. of gold cost $35. Today its over $900. Same dollar, same gold. The dollar has lost over 90% of its value relative to gold in that time. Those who have saved in paper dollars have been losing wealth. Save in something tangible, unprintable, natural, indestructible, and limited in supply.As the world continues toward war, terrorism, and economic uncertainty, it is imperative that everyone protect themselves by having at least some precious metals in their portfolio. Whether you are a large or small investor it makes sense, and with First National Bullion it is very easy to do.This perfect storm is reminiscent of what happened in the late 70's and early 80's when the metals markets last ran and has sparked a major rally in the precious metals market again. It is important to keep in mind, past performance is never indicative of future results. When adjusted for inflation we are nowhere near the highs we saw in the early 80's when gold went to $850. Today many investors don't like what they see in the world financial markets and don't believe stock prices will advance much further, nor do they think interest rates will stay this low down the road. Bonds could also be hit very hard in the near future as well, and with rates rising the real estate market is uncertain as well as fewer people will be able to afford to buy at the current record prices.
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Treasury bills are the next big bubble (to burst). Investors and most asset managers have in average 20% cash and 30% invested in short-term treasuries. For a certain period this might be the right asset allocation.
Since the yields on cash and short-term treasuries are almost 0% in major currencies, Gold is getting more attractive as an investment. Now you have to ask yourself, if you rather want to be fully invested in classical assets only where the supply is exploding by the new money printed or at least add some Gold which can't be copied, printed and is nobody's liability? People today often think that the U.S. government has the gold to back the currency in Fort Knox, not knowing that the U.S. government has only 261 million ounces of gold or less, which, even if they had the full amount is not enough to back even 1% of the money in U.S. banks! A Tremendous Opportunity for Investors
For century's gold and silver have been a haven for investors in times of economic uncertainty. In today's economic climate, the prudent investor will consider converting at least part of his or her assets into precious metals. This may be the ideal time to invest in precious metals by establishing your First National Bullion account.
Inflation and Gold in a Nutshell
"This newly created money goes out into the economy and it dilutes down the value of the dollars that were already out there. It's like pouring water into a pot of soup, it dilutes the soup. So by throwing more and more money into the economic soup out there the money gets weaker and weaker and weaker and we have the phenomenon called inflation which is the appearance of rising prices. I emphasize the word "appearance" because in reality prices are not rising at all. What we're seeing is that the value of the dollar is going down, that's the real side of the equation. If we had real money based on gold or silver or anything tangible that couldn't just be created out of thin air, it could be based on microphones, that they couldn't just create with the stroke of a pen, you would see then that prices would remain stable over a long period of time. To illustrate that point, it's interesting to know that if we had lived in ancient Rome with a one ounce gold coin we would've been able to buy a very fine toga, a hand-crafted belt and a pair of sandals--that was the price in Rome. Today, if we have a one ounce gold coin what can we buy with it? We can go into any men's store and buy a very fine suit, a hand-crafted belt and a pair of shoes. The price of these items hasn't changed in thousands of years when expressed in terms of real money but when expressed in terms of these things we carry around in our pockets called Federal Reserve notes which is not really money at all, fiat money anyway, the prices keep going up and up and up because the value of those units keeps going down and down and down because they keep making more and more and more of them and dumping them into the economic soup."
- G. Edward Griffin, Author of The Creature from Jekyll Island
- A Second Look At The Federal Reserve
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