The US dollar took a plunge this week in the aftermath of the political turmoil that engulfed Washington. The controversy surrounding President Trump’s firing of FBI director James Comey had already led to nervousness in the markets earlier in the week. News of the special counsel appointed to investigate allegations surrounding the Trump campaign took markets by surprise and led stock indices to tumble. The dollar index was among them, and it continued to drop as the week progressed.
But this dollar drop isn’t an isolated occurrence. The dollar index has been falling for months, and rightfully so. This week’s drops are just stronger indicators of the dollar’s underlying weakness. Investors are finally beginning to wake up to the dollar’s fundamental deficiency as a currency. Unlike a gold standard, there is no backing behind the paper money we all use. The only thing keeping the dollar afloat is the trust that people place in the US government not to create an unlimited amount of new money. That trust is slowly eroding.
Trillion Dollars of Debt Needs to be Paid Off
For over a decade the US economy has been propped up by the Federal Reserve’s loose monetary policy. Trillions of dollars of debts that should have defaulted during the financial crisis were papered over with credit created out of thin air. But while this may have bought some time for indebted homeowners and businesses, that’s all it did. Eventually, those debts will have to be paid off, or there will end up being another round of defaults. The piper will always have to be paid.
While the Fed may have temporarily helped debtors through its creation of new money and credit, it has harmed savers and investors. New money and credit circulating throughout the economy has driven up prices across the board, the price inflation that is reported every month. Food, clothing, and housing are more getting more expensive by the day. Every new dollar that the Federal Reserve creates will diminish the purchasing power of every existing dollar. That means that your retirement savings, your bank account, the dollar bills in your pocket will buy less and less in the future.
That is why it is so necessary to protect your savings against inflation and ensure that you can maintain the same standard of living you enjoy now well into the future. The best way to protect yourself against inflation and the reduced purchasing power of your dollars is to make smart investments that will hold their value against inflation. Gold and silver fit that bill perfectly. Gold and silver have acted as hedges against inflation for ages. In 1913 both a $20 gold coin and a $20 bill would have bought over 100 pounds of beef rib roast. Today that $20 gold coin still buys over 100 pounds of beef, but that $20 bill will only buy you two pounds.
Investors Have One Smart Option
That protection of purchasing power is why investors have started to move back into gold and silver. Increased demand for safe haven assets this week drove gold and silver prices up substantially. Gold and silver prices will only continue to increase as safe haven demand grows. Investing today will ensure that you reap all of gold’s protective benefits while also benefiting from the increasing asset values that are bound to come in the future.
Thankfully, it has never been easier to invest in gold and silver. A gold and silver IRA allows you all the benefits of owning gold, while also taking advantage of IRS tax loopholes for retirement accounts. If you want to ensure that your retirement savings are protected, you owe it to yourself to look into investing in gold and silver today.