In recent months, news reports have been filled with alarming and depressing information. At such times, it is especially important to maintain a positive attitude and think rationally.
You cannot change what has already happened, you cannot ignore the crisis, but you can and must decide how to deal with difficulties. It is in the power of every person to take reasonable measures to survive the recession with minimal losses and to be in a favorable position when the situation improves.
Jeff Clark, senior analyst at the precious metals dealer GoldSilver, shares his thoughts and suggestions on this topic.
Attack on the purchasing power*
According to Jeff Clark, in just three months, the amount of quantitative easing* undertaken by the G20 countries exceeded the amount of QE done for the period from 2009 to 2011.
The analyst believes that this indicator will continue to grow. During the global financial crisis (2008-2012), the Fed* limited quantitative easing. This time it is stated that restrictions would not be introduced.
“We can debate whether these extreme measures are necessary or not. But one thing is clear: These actions dilute our currency. They erode our purchasing power. The full effects may not be felt today, but they will tomorrow. However, in this situation, there are solutions,” says Jeff Clark.
Buying physical gold
The Fed can print currency, but it cannot print gold. This fact adds a special value to the yellow metal.
According to the analyst, the monetary abuse practiced by the authorities will ultimately lead to inflation. This seems like tomorrow’s concern, but when purchasing inflation insurance, you need to bear in mind: today you can buy more gold for your currency than tomorrow.
Jeff Clark has no doubt that the price of the yellow metal will rise. Temporary declines are likely, but the overall trend will be upward. “In my view, gold will be very useful to us in the future. This is an alternate currency that cannot be diluted and can be easily turned into money if the need arises. When it comes to my finances, I sleep better owning real physical gold.”
Jeff Clark has confirmed the fears that many experts share and which we have already mentioned earlier.
No matter how you look at the current situation, one fact is undeniable: gold plays an increasingly important role in the ongoing processes. The precious metal easily withstands the pressure of the crisis, ensuring Financial Security for governments and ordinary people.
As of May 25, 2020, the price of an ounce of gold is $1,729.
*Purchasing power — an economic indicator that shows the amount of goods and services that can be purchased at the current price level by the average consumer.
*Quantitative easing (QE) — a monetary policy whereby a central bank buys government bonds or other financial assets in order to inject money into the economy to expand economic activity.
*The Federal Reserve System — aka the Fed, is the independent agency that oversees the commercial banking system and acts as the central bank of the United States.