As Uncertainties Continuously Loom Overhead, Americans Protect Their Legacy with Self-Directed Gold IRAs

The national debt clock continues its relentless march forward. Even at $33 trillion and counting, lawmakers on both sides of the aisle focus on raising the debt ceiling instead of cutbacks. American taxpayers have reason to worry about what this debt-ridden future holds. Fortunately, a Gold IRA may be the answer to protecting your retirement in these unprecedented times.

How Can You Protect your Financial Future with Gold IRAs?

Shockingly, attention to this massive national debt load is minimal. Lawmakers barely mention it. Any remaining monetary discipline has been replaced with wasteful spending on both sides of the aisle.

Surprisingly, this staggering debt load has been manageable recently thanks to historically low interest rates. But today, interest rates are normalizing. Soon, interest payments on the national debt will exceed the country’s massive defense budget.ⁱ

But that’s not the only challenge facing the country. We also have inflation to deal with for the first time in several decades. Of course, the Federal Reserve has been raising rates as an attempt to cool rising prices. However, it has far fewer options today since “emergency measures” have been taken almost continuously since the 2008 crisis. And of course, these measures accelerated with the COVID-19 pandemic. But bottom line, the Fed is closer to running out of bullets than it has been in the past.

Of course, the U.S. is not alone in this predicament. Other countries, including Japan, the U.K. and other European countries, face similar challenges. In our interconnected world, that creates danger as one country's problem can quickly create an international domino effect.

Fortunately, precious metals can provide a time-tested way to protect yourself from financial crises and economic uncertainty.

Gold has acted as a universal currency and store of value for thousands of years. This precious metal also serves as an inflation hedge and a safe haven to protect from dollar devaluation. Of course, that doesn’t mean you go 100% into gold and precious metals. Instead, it is wise to diversify and hedge your retirement savings with some exposure to gold and precious metals.

Don’t Wait too Long to Invest in Gold and Protect Your Assets

Gold is rising as people in the United States and worldwide are becoming more concerned about protecting their assets and owning an inflation hedge.

In the 1970s, some people effectively protected their wealth against inflation and dollar devaluation with gold. But in most cases, the masses didn't realize this until gold was already hundreds of percent higher. At that level, it may be too late to hedge against losses.

Many Americans (and Central Banks) are Stockpiling Gold Now

That’s why hundreds of Americans have already taken action to protect their wealth by creating a Gold IRA. And they aren’t alone. In recent months, we’ve witnessed record gold buying by central banks worldwide.ⁱⁱ

But how do you buy gold as an inflation hedge and safe haven for your retirement savings? Fortunately, it's easy. You can request the free Gold IRA information kit of your choice from America's best Gold IRA companies. Requesting free information from the reputable Gold IRA company best suited to your individual situation takes less than one minute.

And if history repeats, this may be a few minutes well spent.

See the 5 Best Gold IRAs

A repeat of 2008 or even the 1970s is not all we have to worry about. Today’s situation is far worse in many ways.

Top 7 Reasons the Coming Economic Collapse will be worse than 2008

1. Snowballing National Debt

   The U.S. national debt exceeded $33 trillion as of September 15, 2023.ⁱⁱⁱ This is more than America's annual economic output measured by its gross domestic product. The last time the debt-to-GDP ratio was more than 100 percent was in 1946, when the nation had to pay for World War II.^iv In a true emergency, incurring higher debt may be a necessary step. However, much of today’s $33 trillion was accumulated during peaceful, prosperous times.

2. Inflation and Interest Rates Leave Little Room to Cut Rates

   The Federal Reserve has traditionally used interest rate reductions as a powerful stimulus. Before the crisis erupted in August of 2007, the federal funds interest rate sat at 5.25%, higher than today. And the inflation rate today is almost double that of 2007.

   As a result, the Fed will have less room to lower rates in the next crisis. And if it does, that may stoke inflation further, which can hasten economic distress and collapse.

3. The Biggest Banks are Even More Dangerous

   In 2008, many watched in disbelief as some of the world’s largest banks and financial institutions teetered on the verge of collapse. And we now know how the story ends: a massive taxpayer bailout. This situation brought about the 2008 event now termed the Global Financial Crisis (GFC).

   Legislators and regulators promised these vulnerabilities would be rectified once the crisis was resolved. Yet years later, the five biggest banks are much larger and more critical to keeping the economy afloat than before the Great Financial Crisis started.

   The government made matters worse when it mandated that some of these alleged “too big to fail” banks absorb the failing banks. According to a 2022 Barron's article, “Regulators Still Aren’t Serious About Ending Too Big to Fail,” a spate of recent mergers has again ramped up leverage and risk.^v

   Consequently, the failure of these banking giants today would be catastrophic. And given the interconnectedness of these large banks across the globe, that could finally trigger the anticipated economic collapse that will likely have negative consequences worldwide.

4. Danger from Derivatives is Worse than in 2008

   Warren Buffet famously referred to derivatives as “weapons of mass destruction.” The world saw that potential in 2008 as they threatened the existence of decades-old banking institutions.

   Post bailouts, the dangerous derivatives on bank balance sheets back in 2008 did not disappear as regulators promised. Today the derivatives exposure of the five biggest American banks is significantly higher than before the Great Financial Crisis. The derivative bubble is disconcertingly far higher today.^vi

5. The FDIC Lacks Reserves to Cover Another Crisis

   The FDIC’s website states that its role is to “protects depositors' funds in the unlikely event of the financial failure of their bank or savings institution.”^vii But here's the problem: who will bail out the FDIC if it doesn’t have enough to cover deposits in a large shock?

   That happened in 2008, and since then, there has been no significant addition of reserves. The FDIC targets a 2% reserve ratio. This may be sufficient in good economic times but is unlikely to do much in another true crisis. In addition, you are only covered up to $250,000 total per bank if you have multiple accounts.

   One economist told PBS on January 30, 2014, that he was removing his money from a big bank, leaving only $10,000, due to these risks. Sound logic especially now as it was back then.

6. The Fed Balance Sheet is Still Expanded from the 2008 Crisis

   The Federal Reserve’s balance sheet is one way to measure Quantitative Easing (Q.E.). During the 2008 Financial Crisis, the Fed dramatically expanded its balance sheet to counter the crisis and help rebuild the economy. From a starting point of $910 billion in September 2008, the balance sheet increased to $4.52 billion by 2014.

   The COVID-19 pandemic saw the Fed aggressively grow its balance sheet with Q.E again. The total ballooned from $4.52 trillion to nearly $9 trillion by mid-2022.

   One of the many drawbacks of quantitative easing is that it usually leads to surging inflation, which is now apparent. But now, the Fed has much less room to fight it.

   In addition, the Fed still has nearly $1.8 trillion in mortgage-backed securities on its balance sheet. This is more than double the less than $1 trillion it held before the Great Financial Crisis began. If mortgage-backed securities falter again, the Federal Reserve has less maneuverability to absorb bad assets than before.

7. A New Trend of High-Tech Layoffs Has Started

   Unemployment has not been on the minds of Americans for a while due to a red-hot job market. However, things are changing fast. A wave of layoffs is sweeping America's tech industry. These are high-paying jobs, making their loss more economically significant. And since technology companies are losing favor with investors, layoffs are likely to be a continuing trend.

   Job losses can make an economic crisis or collapse much worse, as they can destroy consumer demand when it is needed most. And with Americans saving less and putting more on credit cards, the country is unprepared for this type of crisis.

What Does History Tell us about the Next Financial Crisis?

In an all-out financial crisis, investors risk being left with worthless stocks and other paper assets, resulting in wiped-out retirement account savings. Or, the damage may be less visible but equally as damaging if the U.S. dollar loses value quickly, eroding Americans’ purchasing power.

Even lesser issues can have devasting impacts. Recently, we have seen the cryptocurrency industry experience runs on crypto banks. Depositors saw their accounts slashed in value or become inaccessible in a bankruptcy proceeding.

Another comparison is the 1970s. While there wasn't an economic collapse, stocks dropped in one of the longest–lasting bear markets in modern history. Inflation skyrocketed. Jobs were lost. This time in history is often referred to as a “lost decade” due to financial despair that was widespread and strong. But this was not even an economic collapse. This was a “stagflationary” period not unlike today, with slowing growth, spiking inflation and high oil prices.

The one asset that provided protection in that decade was gold. The precious metal did not simply hold its value. It soared from $35 per ounce to $850, a rise of over 2,300%.^viii Those who had the vision to diversify their funds into gold early on preserved their wealth during a time when most suffered heavy losses.

Today’s Circumstances are Much More Serious

We find ourselves in a far worse situation today. While the 1970s economic woes were primarily spurred by complex geopolitics and spiking oil prices, today, the stakes are much higher.

Today, the U.S. dollar is facing the risk of losing its status as the world’s reserve currency. China, Russia and other nations are actively working together to minimize their dependence on the dollar.

If the U.S. loses this status, it can no longer continue to run such a ridiculously unbalanced budget. Other countries will not be forced to buy dollars and support this decades-long trillion-dollar debt binge. If that occurs, Americans would experience extreme dollar devaluation that would likely plunge the country into depression.

At the same time, other countries are selling off U.S. treasuries and replacing those with gold. That’s not a surprise, as other governments see the wasteful spending by U.S. congress continues with little or no attention paid to getting the debt under control. It is understandable why they don’t want to hold too many U.S. dollars if they don’t have to. Alan Greenspan, former Federal Reserve Chairman, perhaps said it best back in 2014:

“Gold is a currency. It is still, by all evidence, a premier currency,
where no fiat currency, including the dollar, can match it.”

Gold IRAs Can Help You Hedge Your Retirement Savings

Gold is one of the few time-tested options if you are looking to protect yourself in a financial crisis. During past market shocks, gold helped people preserve their wealth. Gold will typically spike as your stocks and bonds fall in value, helping to hedge your losses.

The chart below shows gold’s performance in recent recessions and market shocks.

Gold Performance in Recessions

How Can You Buy Gold?

Gold is a real asset that you can literally hold in your hand. That makes it immune to most of the counterparty issues that plague today's electronic assets.

However, because it is a hard asset, the buying process is a bit different. It is wise to familiarize yourself with the process before moving forward. That way, you know what to expect and, more importantly, mistakes to avoid.

While you can buy gold directly with cash, putting gold into a Gold IRA can help you make the most of tax advantages. At the same time, you can balance out and diversify your retirement funds to provide protection against adverse economic events.

The Gold Industry is Unregulated, So Proceed Carefully

You will want to deal only with the leading Gold IRA professionals for your purchases. Because it is an unregulated industry, you want to be highly selective. At Best Five, our team does the initial legwork so you don't have to. We've scoured the industry to find the top Gold IRA companies and have created our best 5 list. You can start your research here to find the best fit for you.

Each of our providers has been vetted for the following:

• Customer complaints
• Customer feedback and reviews
• Years in business
• Fair policies and pricing
• Responsive Customer service

Only the best and most experienced providers with top service records make it into our annual list, so this is a safe way to start your research.

Different Gold Investments for Gold IRAs

Gold is gold, right? Wrong! In today's investment market, there are many different types of gold that you can purchase. Beware of Gold ETFs and gold mining stocks as they carry unique risks and may not follow the price of physical gold.

For the best protection, here are the types of gold products to focus on.

Gold Coins

The most common of gold investments globally, gold coins such as the Gold American Eagle, the Gold American Buffalo, the Gold Canadian Maple Leaf, the Gold Chinese Panda, the Gold Austrian Philharmonic, and the Gold South African Krugerrand are an easy way to hold your precious metal investment and as such tend to favored for holding in Gold IRAs. Gold coins also provide an excellent way to pass on an inflation-protected inheritance to your children. Many of these coins are also eligible for placement in your self-directed Gold IRA.

Gold Bars

Gold bars are usually the most efficient gold investments when you’re buying a more significant amount. Many investors prefer to purchase gold in this form as it is simply the most efficient way to hold this asset. Like gold coins, gold bars are recognized globally and come in a wide variety of weights and purities.

If you're investing through a Gold IRA, you'll need to limit your purchases to those that meet IRS purity standards. Your Gold IRA company can help you make eligible selections.

The Best Time to Consider Gold IRAs

While Gold IRAs are favored as an essential retirement savings balancing and diversification tool that is worthwhile for you to consider, it is critical to do so proactively at certain times. In the 1970s, when gold rose over 1,200 percent in a decade, most investors clamored in at the end of the run. While they may have had some protection, those most sheltered from financial harm were those who got in early.

Ready to learn more about protecting your retirement savings with Gold IRAs?

While it is always worthwhile to invest in gold, there are a few key indicators to look out for before you do to ensure you make the most profit long-term.

Some of these key indicators include America's soaring debt, dollar devaluation, skyrocketing inflation, and market volatility, all of which have been known to boost gold prices.

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This is a sponsored article. The article should not be considered as advice.