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Can a Gold IRA Rollover Help Protect Your Wealth in the Upcoming Economic Hurricane?

The CEO of the largest bank in the country recently warned investors of an approaching economic hurricane.   Jamie Dimon of JP Morgan Chase said the bank has prepared itself for this, noting “that hurricane is right out there, down the road, coming our way.” [i]  It appears that the hurricane may have already touched down. Based on a CNBC report, a housing recession is currently underway. [ii]  Further, a Bloomberg article states that U.S. mortgage lenders are starting to go broke [iii].  Clearly, it’s time to prepare for a worsening downturn, although we don’t know yet how severe it will be.  Traditionally, investors have turned to gold to protect their wealth in uncertain times. One of the most tax-efficient ways to do that is through a Gold IRA Rollover.

Just How Bad Will it Get This Time Around?

It’s no surprise that we’re headed for recession since even the U.S. economy cannot continually outrun excessive government debt and money printing.  And, after a record-long bull market, a bear market is normal and expected.  The question is….how severe will it be?  Eventually, reality is likely to reflect the extremely loose monetary policy and “emergency measures” that were kept in place from 2008 until recently.  We’re seeing that now with the return of inflation.

The CEO of Twitter and Square, Jack Dorsey, is on record predicting hyperinflation in the United States and other countries.[i]  This is an extreme situation where prices increase rapidly, 50% or more per month.[ii]  In reality, hyperinflation is rare.  However, Former Federal Reserve Chair Ben Bernanke and former Treasury Secretary Larry Summers both predict a more severe recession.  They are also expecting stagflation, similar to what happened in the 1970s. [iii]

And these events may be accompanied by a market crash, as was experienced in that same time frame. 

Lessons From the 1970s

While there’s no crystal ball, we can look to history for clues.  In the United States, the seventies were a decade of extremely high oil prices and rising inflation which led to something called stagflation.  Stagflation is an informal term defined as a period of weak growth combined with rising inflation.  These conditions produced the second-longest bear market in history, second only to the Great Depression. [i]

This combination of factors made the 1970s a particularly depressing time in American history for investors since the prices of most assets dropped precipitously and remained low for most of the decade. 

What assets performed well during the 1970s?  Gold and precious metals.

How Did Gold Perform in the Inflationary 1970s?

During the 1970s, the price of gold increased by a factor of 25.  It went from $35 to $850 per ounce.  At that time, interest rates in the United States spiked to 20%. [ii]  Most investors consider that time a “lost decade,” but it was the opposite for gold investors.  Even those with just a smaller allocation of their portfolio invested in gold could have stabilized their assets. 

Why It Pays to Be Proactive

The problem is that many people take a “wait and see” approach.  Especially when there’s fear or panic, precious metals can experience a dramatic flight to safety.   If you’re forced to chase, you may end up paying more, which dilutes the protective power of these metals.  So now is the time to act since gold’s price is still quite low in comparison to estimates:

  • Bank of America analysts estimate gold will end 2022 at $3,000.[iii]
  • Goldman Sachs has estimated that gold will end the year at $2,500.[iv]

With just a handful of months left in the year, what might trigger a significant move by gold into year-end?  Many are expecting a market shock as the Federal Reserve continues tightening into this inflationary environment.  You may recall that the market crashed in September 2000 (Dot Com Bubble) and September 2008 (Global Financial Crisis).  And according to Lily Fang, a Professor at the Massachusetts Institute of Technology, most stock market crashes have historically occurred in September and October. [v]

Market shocks can happen anytime and often without warning.  That’s why now is the best time to ensure you’re prepared.  One good way to invest that helps manage taxes is to consider a Gold IRA rollover.  By shifting some of your equity exposure to gold, you can help protect your wealth from what’s coming down the line.

 What are the Risks of Ignoring This Situation?

Many professional money managers consider a fixed allocation to gold as “portfolio insurance” to protect you against the unforeseen.  But today, there is no question risks are elevated.  With an estimated 70% of global wealth invested in real estate, how will the masses feel once they realize they may be underwater soon on their homes and investment properties? [vi]  That, combined with the already falling stock market, will likely make people move into safe havens.  Like in the 1970s, there was a clamor for gold late in the decade, spurring its parabolic rise.  But those acting late ended up paying more and reducing or eliminating their benefit. 

The key here is to protect your assets proactively.  It’s much more important today since inflation is continually eroding your future buying power.  And with recent government stimulus in the form of a massive student loan forgiveness program, inflation is unlikely to let up anytime soon. 

Why Hold Precious Metals in a Gold IRA Rollover?

That’s why many people invest in precious metals to protect their wealth from all these events.  One of the best ways to do that is with a Gold IRA Rollover or a 401(k) Gold Rollover so that you can do it in the most tax-efficient way possible.

There are usually three ways to do this while avoiding any immediate tax consequences:

  • If you have an existing IRA, you can usually roll it over into a Gold IRA.
  • If you have a 401(k) with a former employer, you can roll it over into a Gold IRA.
  • If you have an existing 403(b) or another type of retirement account with a former employer, these are also usually eligible to roll into a Gold IRA.

Just be sure to work with an experienced precious metal dealer like Allegiance Gold, who has helped thousands of people set up these accounts correctly and efficiently.  It’s essential to do it right to avoid any taxes or penalties on the conversion, so be sure to pick a proven provider.

For more details, download our free guide to Gold IRA rollovers.


It’s a dangerous time out there, with top finance leaders warning of an incoming economic hurricane.  It is debatable whether or not it is here yet, but it’s wise to put your protection in place before it arrives in force.

If you don’t own gold, you know neither history nor economics.

—Ray Dalio 

Ready to protect your portfolio from whatever the future holds? 

With over 50 years of experience serving thousands of customers, Allegiance Gold can help you secure your wealth from today’s economic threats

Get started today.

[i] https://www.capitalgroup.com/advisor/tools/guide-to-market-volatility/mountain-chart/1974-recession.html

[ii] https://moneyweek.com/2254/money-morning-gold-bull-run-and-the-1970s-12410

[iii] https://www.investing.com/analysis/chart-of-the-day-bofa-targets-3000-gold-by-2022-heres-our-shortterm-call-200522447

[iv] https://www.business-standard.com/article/markets/goldman-sachs-sees-gold-prices-hitting-2-500-oz-by-year-end-122030900328_1.html

[v] https://www.bbc.com/news/business-30793329

[vi] https://www.thecable.ng/mckinsey-two-thirds-of-global-wealth-stored-in-real-estate

[i] https://www.cnbc.com/2021/10/23/twitter-and-square-ceo-jack-dorsey-says-hyperinflation-will-happen-soon-in-the-us-and-the-world.html

[ii] https://www.investopedia.com/terms/h/hyperinflation.asp

[iii] https://www.washingtonpost.com/opinions/2022/03/15/fed-powell-fight-inflation-interest-rate-hike/

[i] https://www.cnbc.com/2022/06/01/jamie-dimon-says-brace-yourself-for-an-economic-hurricane-caused-by-the-fed-and-ukraine-war.html

[ii] https://www.cnbc.com/2022/08/23/what-a-housing-recession-means-for-homeowners-buyers-sellers.html

[iii] https://www.bloomberg.com/news/articles/2022-08-19/mortgage-lenders-are-starting-to-go-broke-as-loan-volumes-plunge#xj4y7vzkg

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