Mainstream Media keeps pounding out the prevarications about the strong U.S. economy while behind the rhetoric the real story plays out. Wall Street (and the global financial system) is in trouble and the Fed is in the process of propping it up and bailing it out again. It’s reminiscent of 2007 but worse…
For further reading on the subject…
Overnight Repo Market: Fed increase from $75B to at least $120 Billion beginning 10/24/19 – Mish Talk
Elizabeth Warren Demands Repo Answers – Wall Street On Parade
What to do to keep from losing your assets this time around?
To begin with, you can alter your investment strategy from one of yield seeking to one of wealth conservation. This means reducing equities exposure and increasing your exposure to bonds and commodities if you wish to stay in the stock market.
Additionally, you can take steps to protect your purchasing power by investing in physical precious metals such as gold and silver. A question people ask themselves when investing in gold and silver is, “How much should I buy?”. Some say “as much as you can afford”. A more practical approach to making that decision could stem from the question “how much do I need if paper money loses its value” such as in a collapse of the fiat monetary system.
A couple of phrases to consider…
Buy Gold to Hold and Silver to Spend or put another way – buy Gold as Capital and Silver as Cash Flow. If we think of it with this perspective, we can calculate about how much Gold we need to replace our savings and/or retirement funds and how much Silver we need to replace our cash flow over a guesstimated period of time.
An example would be: $100,000 of savings in paper money = 10 24k gold 1 oz. coins at a forecast value of $10,000 each which can be purchased at approximately 3 – 5% over Spot Price. The ratio of Gold to Silver price varies – it has been speculated that it could, in the next few years reach 1:15; however, in the last 30 years, the lowest ratio has been 1:32. If we take the more conservative ratio of 32, then when gold reaches $10,000 per oz., silver would be $312 per oz. at the 1:32 gold/silver ratio. With that valuation of silver, a $3,000 per month cash flow would require 10 silver oz. per month x (let’s guess it will be needed for a 5 year period until the national and global currency system stabilizes) 60 months = 600 total silver oz.
Once you acquire your physical gold and silver, you will want a secure place to store it. Because of the potential for confiscation (slim chance as it may be), storage outside the banking system is recommended by many precious metals professionals.
Gold and silver aren’t the only considerations for liquid exchange instruments that you should consider having ‘on hand’ – a reasonable stash of cash is always good to have quick access to during emergency situations such as power outages, natural disasters, and bank failures.
“In a time of deceit telling, the truth is a revolutionary act.”