The History of Precious and Rare Metals as an Asset Protection Strategy

metals1In the course of American history since the Great Depression, there have been ups and downs in the stock market and the in the economy—with the most recent tribulation being the housing and financial crises in 2008. This sent major banks and financial institutions reeling, and necessitating the need for a taxpayer funded industry bailout. It is not surprising that the average investor today is wary, with their finger precariously positioned over the eject button. How can you protect the portfolio of assets you have worked your whole life to accumulate? How can you hedge against future earthquakes and aftershocks in today’s volatile global economy and adopt an asset protection strategy that will protect you and your family for the years ahead?

Turning To Precious Metals

Many investors have, for a long time, turned to gold and silver, and to a lesser extent platinum, to protect their interests against the inflation of paper currency. At one time in the US, and elsewhere, paper currency was backed by a reserve of gold bullion, and could be redeemed for gold or silver on demand. But after the market crash and the resulting depressions of the 1930’s FDR, fearing a run on banks recalled all gold bullion and certificates into the treasury in 1933. Here, the government could have the reserve necessary to start printing paper money that would fund the pubic works projects that would get America back on its feet.  Private Citizens were no longer allowed to own gold bullion beyond a hundred dollars— while the government horded this precious metal in Ft. Knox and other government vaults across the US, as a basis for the printing of paper money that was to follow.

Governments have known for a long time that one way to stave off the effects of a recession is to increase the money supply. In 1934, one year after gold was recalled; congress raised the conversion rate from $20/ounce to $35/ounce, increasing the bottom line of the Federal Reserve’s balance sheet by 70%, enabling them to put even more paper money into circulation. Inflation continued until 1970 where Richard Nixon took us off the gold standard completely and announced the US government would no longer covert dollars to gold bullion—knowing there was not enough gold in the world to back up all the paper money that had been printed up to that time. Then in 1974 Ford signed a bill that permitted Americans to own gold bullion once again. Ever since then precious metals, most notably gold and silver, have been in demand as a solid piece of any investment portfolio.

Just recently a huge spike in demand for silver, fueled by the electronics industry, has renewed interest in precious metals as not only a hedge against inflation and asset protection strategy, but as a sound investment in and of themselves. As an asset protection strategy, the acquisition of precious and industrial metals is unrivaled in today’s tumultuous global economy.

Investments in precious metals are liquid assets and a valuable asset protection strategy with intrinsic and inherent value in and of themselves, and have the following features:

  • Real intrinsic value
  • Inflation proof
  • Investment insurance
  • Easily bought and sold and stored (liquid)
  • Responds to global markets
  • Adds diversity to any portfolio

There are many choices to consider in the lineup, beyond gold and silver that have real intrinsic value in today’s high tech, industrial, manufacturing, electronics and defense industries. In addition to gold and silver, chromium, gallium, tungsten, indium are just a few of the precious industrial metals that have real applications and value in today’s marketplace.

To learn more about the use of rare metals as an asset protection strategy, download our free report here.

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