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Is The Price Of Gold Affected By The National Debt?

By September 9, 2020 No Comments
rising gold prices

With the national debt continuing to rise, does the price of gold or other precious metals get affected?

 

For those of you that follow the stock market and especially precious metals, the price of gold has risen to historic levels this past year.  Due to the global pandemic and the trillions of dollars being pumped into the U.S. economy, the rise in gold prices has been the biggest positive constant that has been happening for investors.  With nearly 27 trillion dollars in debt, the U.S. economy is suffering and there is a close relation to why the rise in gold has been the best outcome of the accruing national debt.

When President Nixon removed the gold standard decades ago, in which the dollar’s value linked to that of gold’s value, it opened the door to the government overspending.  Since everything was now “trust-based,” the government would not have to link any of the money that they were spending to the value of gold.  Now in the year 2020, overspending with money that is being created almost daily has increased the value of gold.  Since gold is now unbacked or recognized by economists as fiat, the precious metal has become more lucrative than ever to invest in.

The Removal Of The Gold Standard

We are in a period where almost every aspect of life is not as predictable as years before due to the pandemic.  With no sense of normalcy in sight yet, in order to survive and pay bills that need to be paid, the U.S. has given citizens a considerable amount of supplemental income.  With that being stated, the national debt has risen to amounts that are unthinkable.  The reality is that we, the citizens of America, will have to eventually have to pay it back.  The amount of money to pay the debt back can come from almost every financial aspect of an individual’s finances.  From pensions and 401K’s to savings accounts and IRA’s.  Increased taxes can also be yet another outlet to reduce the debt bubble.  If the gold standard was still in place, we can assume that the national debt would not be as bad as it was before the pandemic. 

Debt and Gold

With national debt rising and seeing levels that have never been reached before, interest rates that are controlled by the Fed and Central Bank system have been rising.    A strong urge to roll over any retirement savings to gold, such as a gold IRA or 401K accounts have been favored by economists to hedge against inflation and balance portfolio’s risky stocks with safe haven commodities like gold. 

Investing In Precious Metals

With every investor from Wall Street to Warren Buffett including gold and precious metals in their portfolio, this is an investment movement that should be strongly considered ASAP. Gold prices are consistently on the rise and the time to invest is now.  Whether you want to invest in gold or other precious metals, Allegiance Gold can help you with securing and preserving your financial wealth.  Investors have been rolling over their retirement accounts into gold IRAs and diversifying their portfolios to secure their assets. Allow us to show you the value of gold and how it can create financial freedom for you and your family.  

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