When There is Panic There is Gold

When There is Panic There is Gold

The year 2012 is starting out just as we predicted it would—full scale panic!  We’re not just talking about Planet X and ancient Mayan prophecy.  There is also much to be afraid of in terms of political happenings and worldwide economics.  Some analysts are predicting that 2012 may include the collapse of the euro, another episode of the United States devaluing the dollar, and perhaps even war with Iran, since tensions are currently mounting.

What happens when people get nervous?  Of course, taking out all of your money and putting it into something that cannot disappear overnight.  Namely, bullion, whether in bars or coins.  This is metal that you can keep in a safe, on your own property, or even ship to another country.  You can actually buy certificates for precious metal overseas and not have to worry about storing it.

Why are people so paranoid about money and precious metal in times of crisis?  Well, in 2008 many people discovered firsthand how cold recession can be.  They lost thousands because of banks filing for bankruptcy, as well as lost business, lost income and inflation.  However, investors who could see the recession coming, wisely purchased bullion in order to protect the market value of what they earned.  Yes, through precious metals. 

Now let’s go one step further in paranoia.  What happens when the state runs out of money?  They certainly don’t want your credit, since that’s their gift to you.  Your paper currency is equally unimpressive.  Now gold…that’s valuable.  This is a metal trusted all over the world, and let’s face it, in their minds it’s better spent by them than you.

Of course, it wasn’t actually the need for gold that forced Franklin D. Roosevelt to ban gold hoarding in the 1930s.  He saw a much worse problem than bankruptcy—panic.  People were panicking and losing trust in the central banking system.  He saw this as a huge problem, and something that was destined to make the Depression era worse.  So he barred hoarding (outside of a very small allotment) and forced the citizens of the day to put their trust back in the U.S. dollar.  The results were effective, at least in terms of economy.

Could something like this happen today?  Yes, though not everyone is convinced that it will.  If things get worse, the main issue won’t be American currency confidence…it will be survival at all cost and bullion will be in huge demand!  If the recession ends and the United States tastes profit again, then gold will still retain value, even if it doesn’t continue rising in price.  Remember, this is a precious metal and one that never loses its appeal or timeless worth.