Historically, gold has been a fantastic investment to protect against economic volatility. In an age of inflation, gold is a stable choice. Since the early 1930s, the U.S. dollar has lost 99% of its value against gold. Amidst the shutdowns due to COVID-19, supply and demand were greatly affected. Due to this, our economy is experiencing an unconventional recession. Inflation is having a great effect on the value of the dollar, and it is not expected to slow any time soon. American investment advisor Harry Browne, claimed, “When paper money systems begin to crack at the seams, the run to gold could be explosive.”
Gold is an incredibly smart investment for many key reasons. As an investment, gold is relatively low risk; there is a 0% counterparty risk, meaning the probability of another party defaulting on their obligations is virtually impossible. Additionally, during economic recessions, gold has historically increased in value; namely, gold saw over a 100% surge in interest during the 2008-2012 recession. Unlike traditional savings accounts, gold has a higher yield, and it also has a high investment return rate. During economic strife, gold is in high demand, making it a good asset to have during periods of economic uncertainty. To protect your bottom line, go for the gold.
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