2009 Recession Investing – Love over Gold and Silver


Battle with Gold:

The situation has changed. Investing in this safe zone is now a complicated and risky task for businesses and individuals. The job is a little more complicated than in previous years. And all of this is happening because the bane of the financial crisis is all over the world.

The crisis began to show its impact from the middle of 2007 and 2008, when many stock markets collapsed and several other financial institutions collapsed, making unemployment the major problem in the country. Many wealthier nations have been compiled to seek a bailout to bail out their financial systems. In this volatile financial situation, it is evident that investors are more concerned about safe investments in order to survive in this difficult time of crisis. So what can be as simple as a solution?

Today, it is the overriding question that hangs in everyone’s mind.

Invest in gold and silver:

Gold and silver have always been a better solution in the crucial period of financial crisis. Even during the Great Depression (1932-1936) when the price of gold was set by the government, the value of silver doubled, rewarding its investors with a good return. Likewise in the next long bear market which was 1968-1980. Silver rose from around $ 2 in 1968 to a peak of nearly $ 50 in 1980. It is the economic trend that the gold stock will rise during inflation and during deflation. Investing in gold is a good hedge against inflation. Where gold goes up while the value of the dollar goes down. And as the government cuts interest rates significantly and savagely prints inflation-creating money to offset that deflation. This therefore leads to significantly higher gold prices. Thus, investing in gold coins reduces the risk in our investment portfolio.

Reasons to invest money:

  • Silver is a precious metal that is used and valued like silver. Because the Silver offer cannot be simply printed or increased with a simple computer entry, it retains its purchasing power over time. Expanding the supply of silver is a methodical and enduring process that requires significant human effort, investment, exploration, discovery, production, transportation, and storage of a physical item. The precious metal element of an investment is very attractive when other currencies lose their purchasing power.
  • Silver has unique characteristics which are almost invaluable for commercial use. Money is used and consumed by all modern societies. It is used in medical supplies, photography, computer chips, and an increasingly important aspect of our lives. Since most products such as a computer require a very small amount of metal in the finished product, metal users will pay almost any price for silver when there is a potential shortage. With large emerging countries such as China and India with billions of new consumers, business demand for silver is yet another extremely bullish factor to consider.
  • Another key reason for investing in silver is the recognition of “paper money” and its negative impact on the price of real money. Paper money is a paper contract representing money that is not necessarily backed by real physical silver bullion. For example:
  • Financial institutions currently sell silver certificates for pooled money accounts. We understand that these pooled account certificates can be far superior to real money available anywhere in the world. Any short position held by institutions is potentially a huge drag on the price of silver in the free market.
  • Futures markets are another example of a paper contract representing physical money. It is believed that there are more short positions in the silver futures markets than can be physically delivered if necessary. This unnatural condition can be another inhibitor of price appreciation.
  • In the silver price peaks exceptionally as in the 1970s, when silver went from less than two dollars to more than fifty dollars. This is an aggressive appreciation of about 2700%. We believe that we are currently in similar market conditions and that we could potentially have a repeat of this significant growth.

Reasons to invest in gold:

  • According to the World Gold Council, members of the Central Bank Gold Accord have sold 297 tons of gold so far during this deal year. This suggests that the full quota of 500 tonnes will not be distributed to the markets this year. Less supply usually means a higher price.
  • The production of the world’s gold mines remains stable. The sharp increases in the price of gold observed in recent years have not stimulated a significant increase in global gold production. In fact, production could well decline slightly over the next few years. Production is already falling off a cliff in South Africa, once the world’s largest producer of gold.
  • Demand for jewelry in India, the largest manufacturing market on Earth, is starting to pick up again as emerging markets like China and Vietnam have a big impact as their populations earn more money and therefore buy more gold. .
  • SPDR Gold Shares (GLD) formerly known as Street Tracks Gold ETF, whose exchange-traded fund holds physical gold and tracks the metal very closely. As inflation takes off and the value of the dollar drops, gold is expected to rise.

Source by Kiran Bista

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