‘s With an inflation rate holding steady at 8.54% through a 12-month period that ended in July 2022, there’s no doubt that average Americans are feeling the bite everywhere they turn. Your paycheck no longer buys what it used to, and making ends meet has become much harder.
Everyone’s talking about gas prices, food prices, and prescription drug prices as this period of inflation continues. And yet, hardly anyone’s discussing topics like hyperinflation, what to do if the United States dollar tanks, and how to preserve your liquid assets as the US dollar loses purchasing power. Until now.
Hyperinflation and the US Dollar
Hyperinflation is defined as a very high and typically accelerating inflation that quickly erodes the value of the local currency as prices of all goods increase. This increase pushes what’s left of the middle class down toward poverty and shoves those already in poverty to the brink of desperation, just trying to afford to feed and care for loved ones.
While the US hasn’t hit this period of accelerated inflation, other countries have. Zimbabwe is so steep in hyperinflation – around 200% – that its central bank started producing gold coins to try and stem the need for US dollars and increase its own revenue. And while it’s too late for the average Zimbabwean to buy those gold coins, the wealthier set will likely flock to them to save what’s left of their wealth.
Zimbabwe isn’t even the worst case of inflation in the world as of April 2022. Sudan, Venezuela, and Lebanon are all over 200% inflation. It’s so bad in Sudan that they are at an unprecedented 260% inflation. Still, that rate is considerably lower than a year ago, when inflation in the African country was a staggering 387.56%, down from 422.78% in July 2021.
Zimbabwe, Sudan, and Lebanon are all precursors to what could happen in the US and other countries if the Federal Reserve and other central banks can’t get a handle on its rising inflation.
Preparation Starts Now
The old adage, ‘There’s no time like the present,’ couldn’t be more true when it comes to dealing with inflation. Your fiat currency (not backed by gold or silver) paycheck could soon be as valuable as the $.50 cent pack of school paper you slid into your child’s backpack at the start of school.
Imagine putting in a forty-hour work week to afford one loaf of bread or a dozen eggs. That paycheck that used to help you cover your mortgage and electric bill now can’t even buy you a day’s worth of groceries, let alone keep a roof over your head.
For somewhere around 3000 years, gold has held its value against every fiat currency. While all those money systems have broken down and plummeted in value, gold has remained steady.
Silver has also done well and, like gold, is a store of value that you can trust to keep your wealth safe in times when the US Dollar isn’t doing well. How do you invest in gold and silver?
Investing in precious metal commodities is not enough. That gets you a nice little paper certificate saying you owned so many troy ounces of said precious metal. But that's not the same thing as physically owning the gold or silver.
Historically there have been instances of bankers refusing to honor silver certificates in order to claim the silver for themselves. And while there’s a good chance your certificates would be honored, there’s a certain amount of risk in choosing silver certificates over physical silver.
In the case of a house fire or some other calamity, physical silver can withstand the heat, while certificates would be destroyed, making it difficult to prove ownership. Gold is much the same way. Physical gold pieces will withstand a crisis, whereas gold certificates would go up in smoke with everything else.
Physical Gold and Silver Guarantee Your Assets
Investing in the stock market, putting money in an IRA or 401K program, or taking out silver or gold certificates all come with a level of risk. Holding actual physical gold or silver ensures your investment belongs to you. No one can refute your ownership. In the case of silver, especially silver eagles, they are easily recognizable and can spend just like fiat money. Banks and most retailers will accept them as payment without needing to exchange them first.
This makes them especially attractive if you’re looking to start investing in silver or gold. Physical precious metals are a solid foundation to build your savings. They will always hold their value no matter what the US dollar does.
If the dollar tanked tomorrow, your gold and silver would still be holding their value and work excellently as a bartering tool and as ‘cash on hand.’ You can pay your mortgage, car loan, etc., with that gold and silver. Your debt will follow you, no matter what the dollar does.
So, if you want to ensure your money is worth something tangible, start investing in physical gold and silver.
Here Are Some Tips for Making the Most of Your Money:
1. Buy in bulk. Most physical gold and silver dealers will give you a discount if you buy a coin or bar in bulk. The more you buy, the bigger the discount.
2. Use a trusted dealer. Any dealer who can be trusted should be certified by the Better Business Bureau. Holding accreditations from any of these organizations is also useful in ensuring you’re buying from a reputable dealer.
3. Secure your purchase. Whether you buy gold or silver bars, collector coins, or grams, you’ll need a safe place to keep them. Firesafe boxes are helpful in case of a house fire and are also lockable and, in some cases, portable. Whatever you do, make sure you find a secure and safe place to put your gold or silver.
4. Anonymity. If you wish, you can purchase both gold and silver anonymously. Check with a trusted dealer to find out how this process works in case you’d like to have some anonymity about your purchasing habits.
5. Taxes. Owning physical gold or silver subjects you to a capital gains tax and income tax. This physical aspect is different taxwise than owning certificates or other stock investments. Consult your accountant before your purchase to ensure your taxes are in good hands.
Buying gold and silver can be trepidatious the first time you make a purchase. Still, it’s worth putting your money into something that will last when the US Dollar and other fiat currency investments don’t.
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This article was produced and syndicated by Wealth of Geeks.