Why gold is insurance in times of crisis

Gold has been a part of human history since the beginning of time. For centuries, from pharaohs to kings, gold has been associated with prestige, power, wealth, and freedom. If you don’t know much about this yellow precious metal, reading this information will be a great place to start.

So why do I say that gold is insurance in times of crisis? Well, before we start getting into the nitty-gritty of the matter, I have a question for you; Have you ever had an insurance policy? If not, I would imagine that you have at least heard of insurance before and have a basic understanding of what it is. If it doesn’t, Investopedia, one of the leading online financial education resources, defines insurance as: “a contract, represented by a policy, in which a person or entity receives financial protection or reimbursement for losses from an insurance company.” Insurance Insurance Policies are used to coverage against the risk of financial loss.” Well, THAT was insurance jargon, so to make this easier to understand, I’ll give you a breakdown of layman terms; insurance is simply a promise to protect something in the event of a suffer some type of As a quick note, if you want to learn more about some basic insurance products that are valuable and important, please read my article “4 Pillars of Protection: Products to Consider in Your Insurance Portfolio.”

With that said, let me explain why gold is insurance in times of crisis.

At the time of this writing, our world is experiencing a global pandemic called coronavirus gold disease COVID-19. It has stopped almost all regular daily activity, leaving a large population of North America, and the world, unable to work and confined to self-isolation at home. When I first received news about this disease, it was at the end of December 2019. At that time, an ounce of gold cost approximately $1,515 USD. Then, a few months after the virus accelerated around the world, the value of gold peaked at $1,700 USD in March 2020 and then fell back to around $1,650 USD as of this writing. It is not uncommon for gold to go up and down moderately in the short term; however, in the long term, the trend has always been bullish.

I have often told clients that insurance is something you get but hope you never need. Well, in the same way, it is always good to have gold because during times of crisis, people who have gold have the option to liquidate some of their gold assets to get some cash. And this is the reason why gold is insurance not only in times of crisis, but also over time.

Let me explain what I mean with an example based on inflation. Using a US inflation calculator, I determined that what would have cost $288.50 in the year 2000 costs $433.38 today, resulting in inflation of 50.2%. This means that your money LOST more than fifty percent of the purchasing power because you now need MORE of your dollars to buy the same thing! On the contrary, at the beginning of the same year, on January 3, 2000, an ounce of gold valued at the same $288.50; however, on the first trading day of this year (January 6, 2020), that same ounce of gold valued at $1,558.00!* If only I had known the power of this yellow metal and simply “parked” $288.50 in one ounce of gold over that 20-year period, the value of your assets would have grown by 440.03%! Inflation is a slow, gradual increase over time, so many people don’t realize the loss, but now that you KNOW the numbers, you don’t need to be a mathematician to conclude that growth of 440.03% is better than a loss of 50.2%.

So if you had to choose a savings vehicle, which would you prefer: cash or gold? The fact of the matter is this: when you save gold, you protect your future purchasing power in the long run, but when you save cash, your purchasing power is constantly leaking and you are fighting a losing battle against inflation.

If you haven’t been saving gold up to this point, rest assured that it’s not too late to start and all is not lost. The good news is that now you know. And you may have heard the saying that KNOWLEDGE IS POWER before. Well, I believe that the APPLICATION of knowledge is power because if you know something but do nothing, what is the use of knowing? If you want to start applying your knowledge, check out my FREE white paper, “The Truth About Money: 3 Quick Facts You Might Not Know!” and let’s continue your journey towards knowledge and application. To get it now, click here!