When the economy looks as though it’s about to tank, people tend to invest more in precious metals – especially gold and silver.
The general theory being that when fiat currencies don’t hold their value – precious metals do. And if worse comes to worse, if you have gold, silver, or platinum, you’d still have something of value you can buy and trade goods with.
So, are precious metals a worthy investment? Is it a good way to protect against the coming economic crisis?
Here’s one man’s opinion.
The Economic Crisis is Coming
Make no mistake. A financial crisis is coming.
According to financial newsletter writer Harry Dent, the market crash is coming in two to three years, noting that the economy is “already dead.” And I tend to agree.
So, the question is, how are you going to protect against inflation (which is already well underway), and the inevitable loss of jobs and homes?
Precious metals are a good investment overall and will probably always be as applied to crisis portfolios.
That said, it would be unwise to put all your eggs into one basket. After all, you still need to ensure your bills are paid and your family’s needs are met.
Further, a new financial system will be coming, but at this time, we still don’t know what it will look like or when it will be arriving. In the meantime, you’ve still got to survive, and access to fiat currencies will likely be essential, at least for a while.
So, precious metals are not a bad investment. They are among the best safe haven for crisis investing. But for a variety of reasons, they may not be the only thing you should be investing in.
Don’t forget – if push comes to shove, commodities like gasoline, food, and clothing will be of greater value than just about anything you can name.
Precious Metals & Cryptocurrency Complement Each Other Well
But why is that?
Firstly, the crypto market is still quite small. That means it has plenty of growth potential.
Secondly, while the value of precious metals has either stayed about the same or has declined, cryptocurrencies have steadily gone up in value.
Thirdly, if anything should happen to cryptocurrencies, your precious metals will remain a safe haven for your wealth.
So, if you’re skeptical of cryptocurrencies or don’t have total faith that they will even remain an asset class a few years from now, you can rest assured precious metals will be the beneficiaries in such a scenario.
It’s understandable that a lot of people would be standoffish of crypto, especially given the treatment it often gets in mainstream media, whose basic claim is that it’s utilized by terrorists and dangerous people (a loosely held together argument if there ever was one).
But what that should tell you is simply that regulatory bodies don’t like it, not that they have any power to shut it down – at least not yet.
The Worst Investments You Can Make Right Now
Precious metals are a solid investment. Crypto is great if you don’t mind taking a risk (though it’s not for everyone). Food, water, and other basic supplies are worth stocking up on, just in case.
Investing in yourself, knowledge, and skills, is also a good idea (more on that later).
But most other things just aren’t worth investing in right now.
Land is the first. Property would be a good investment because its value tends to go up over time, except that prices have shot through the roof and are inflated beyond reason. It’s a seller’s market through and through, and it’s going to crash hard, just as it did in the global economic crisis.
I also wouldn’t bother with stocks. We already know that inflation will continue at a rapid rate, and you won’t be able to protect any of your wealth in the coming financial meltdown.
Again, this is just one man’s opinion, and even though some financial experts say you should consider core sector stocks, I can’t see that being a worthy strategy based on the financial crisis of 2007 – 2008.
Profitable Skills Might be Worth More
Remember that in a true crisis, money isn’t going to be worth much.
It’s one thing if our power, water, cell phone, food, distribution, and other infrastructures remain intact – quite another if these were all to fail and we were forced to start homesteads and live off the land.
It might seem like a crazy idea now, but the way things are going in the world, you can’t definitively say it’s not going to happen. Better safe than sorry.
Food, petrol, clothing, clean water, shelter, and other basic commodities are sure to skyrocket in value, because they are necessary for life.
If you have skills related to carpentry, textiles, farming, toolmaking, repairs, and other necessities, you’re sure to be of greater value to others in a world where fiat currencies – and even precious metals – might mean nothing.
I’m not suggesting that crisis investing is a waste of time. But it’s good to be aware of where things could go in an all or nothing world.
In summary, there’s nothing better than precious metals when it comes to protecting your finances. That makes them a solid investment.
Cryptocurrencies, however, are quite complementary to precious metals and are worth a look if you have some risk tolerance. They are new and unproven, but they are primed to grow.
Given the current state of the world, I can’t see anything else being a great investment, except for maybe essential supplies.
In a worst-case scenario, though, there isn’t a way to protect your wealth through investments. Basic survival know-how and other essential skills are sure to be of greater value than any currency, physical, digital, or otherwise, and for that matter, precious metals.
- ThinkAdvisor, Harry Dent: Market Crash Coming in 2-3 Years; Economy ‘Already Dead’, https://www.thinkadvisor.com/2020/12/03/harry-dent-market-crash-coming-in-2-3-years-economy-already-dead/
- Cointelegraph, Why Bitcoin, Precious Metals Should Be Partners in Crisis Portfolio: Opinion, https://cointelegraph.com/news/why-bitcoin-precious-metals-should-be-partners-in-crisis-portfolio-opinion
- moneycontrol, Zerodha’s Nithin Kamath: Don’t invest in Bitcoin because I don’t understand it, maybe Elon Musk knew what was happening in China, https://www.moneycontrol.com/news/business/cryptocurrency/zerodhas-nithin-kamath-dont-invest-in-bitcoin-because-i-dont-understand-it-maybe-elon-musk-knew-what-was-happening-in-china-6919251.html
- TRADING ECONOMICS, United States Inflation Rate, https://tradingeconomics.com/united-states/inflation-cpi