Incoming...Economic Meltdown? Are You Prepared? (Part 1)
Updated: Jan 30, 2022
I hate to be a fear monger, but I wouldn't be a good mentor for all my listeners and readers if I didn't raise awareness about some of the things going on in the financial world that will affect each and every one of us over the next few years.
Over the last few years, I've been able to talk with financial experts like Lynette Zang, Jim Rickards, and many others. I've also heard Howard Dayton, noted Christian financial expert, and Robert Kiyosaki, Author of Rich Dad Poor Dad, speak about the collapse of the US dollar and the decline of the US as the singular world power and the ascension of China as the new world power. This transition plan began some 50 years ago, and we now nearing the end or at least what appears to be the end.
With this, you can expect the dollar to lose value through inflation as the growth in the cost of goods outpaces the growth in income. Unemployment, business closures, etc. are all part of a declining US economy and US dollar. In 2021, inflation under the Biden Presidency hit 7% (https://www.theguardian.com/business/2021/dec/10/us-inflation-rate-rise-2021-highest-increase-since-1982) and some experts believe the true inflationary number is in double digits possibly closer to 15% (https://strangesounds.org/2021/07/usa-inflation-much-higher-than-whan-feds-say.html).
Banks and Countries Buying Up Gold and Silver
There's been a pattern over the last decade of central banks and countries stocking up on gold. Why? As the US dollar declines so will it's value. During the time the price of gold has been kept artificially low. We can call this the "acquisition phase" where banks and countries are acquiring as many dollars as possible and then using them to buy up gold and silver. JP Morgan Chase Bank now owns over 600 million ounces of silver. Why?
The US dollar has the been the dominant form of reserves for countries for decades, but it seems countries and banks alike are moving away from the dollar towards gold.
China Buys Gold and Trades Oil
For the last decade, China has been buying up gold (https://www.kitco.com/news/2021-04-19/China-clears-the-way-for-a-massive-amount-of-gold-imports.html) and while records show China's gold horde at 1,900 tonnes, some financial experts it to be over 5,000 tonnes and possibly much much more? Why? As China steps into the role of the next "appointed" world superpower, they will also have to wear the mantel of world reserve currency and to do that, they must have assets...assets being gold.
Another interesting note is that since the 1970s, oil all across the world was bought and sold with US dollars. Over 2020 and 2021, we saw the launch of oil trading using the Chinese Yuan. (https://www.caixinglobal.com/2021-06-22/chinas-first-crude-oil-options-go-live-in-boost-to-derivatives-market-101730326.html)
What to Expect and What Can I Do?
According to Jim Rickards, Lynette Zang, and many others, they and I expect the US dollar to continue losing value...and quickly. As the power of the dollar erodes, gold and silver will experience a value reset. The current gold price hovers somewhere around $1,800 depending on the day. Experts expect this number to reset to over $10,000 and possibly as high as $35,000 per ounce in the coming years. Will it take 1 year? 3 years? 10 years? It's unknown at this time, but my expectations are that gold will remain in a suppressed price point for up to 2 more years possibly experience some price shifting before or after the 2024 election. We'll See.
As a Dave Ramsey acolyte for many years, I avoided gold and silver. After branching off from Ramsey's teaching with additional investment strategies, I bought my first gold and silver in 2019, and I purchase from Nashville Gold and Coin (https://nashvillegoldandcoin.com/) who later became a sponsor for The Millionaire Choice Show. NGC ships all over the continental US.
Many common investors have most of their retirement tied up in 401Ks and IRAs with investments through Blackrock and Vanguard. Both are reputable companies during normal times, but we seem to be entering times that aren't normal. Prior to this economic shift, you may want to review your portfolio and see if you can diversify some of your risk away from being to heavily reliant on the stock market. Consider a Self-Directed IRA which gives you other investment options like real estate rentals, syndication, REITs, individual stocks, etc.
There are many Self-Directed IRA companies available like Equity Trust (https://www.trustetc.com/) and The Entrust Group (https://www.theentrustgroup.com/).