Should you invest in a Gold ETF? (How to invest now?)

WILL GOLD HIT $10,000 per ounce???

FULL VIDEO HERE:

Hey Guys, Ben here from Motivation2invest due the recent health Pandemic, social distancing and subsequent lockdown of the planet.

Governments from around the world have printed Trillions of dollars worth of currency! From the $65 billion dollar’s in the U.K to the $2.3 Trillion dollars in the USA!!

Now, all though this may seem great in short term as a way to prop up the economy but this has got to come from somewhere!

In the past when vast’s amounts of currency was printed this led to HYPERINFLATION!

Where the value of paper currency effectively going to zero!

GOLD has always been a natural hedge for investors during a recession but now it seems as if it’s shining even more than normal!!

So in this video, I’m going to discuss why

This time Gold is not just a safe bet, but many investors have stated it will rise to an incredible $10,000 per ounce!!!

LETS DIVE IN!!

WHY is investing into GOLD unique?

Gold has been worlds most reliable currency since Civilization began, it was first recorded to be used as a currency in 600 BC…before being adopted by Egyptians, Romans and then of course modern civilisations.

Gold was used as a currency due to it’s unique properties, this glowing mental can be melted down & forged into gold coins & shapes.

It’s also anti corrosive so will literally last thousands of years without rusting or corroding like other metals.

Tutankhamen’s tomb alone they found that his coffin was made from 1.5 tonnes of gold

However, one of the main properties of gold is it’s rarity with all the total amount of gold ever mined adding up to just over 171,000 tonnes!

To put things into perspective, all the gold in the world could be fit inside a cube with sides of just 20m (67ft)

This would reach 9.8m above ground level if exactly covering Wimbledon Centre Court.

GOLD AS A CURRENCY?

You may not know this but most currencies are no longer backed by gold as this used to be.

We used to have what’s called

Hard Money (Real Money backed with real assets) gold, copper, silver, nickle. (Coins)
Claims on Hard Money (Paper Money, Bank Notes)

Read on a old $100 bill it says: “100 dollars in Gold coin Payable to the bearer on demand.”

THESE days however, it is a FED based FIAT currency. It’s based on the FAITH we have in the economy.

WHY DID GOVERNMENTS STOP BACKING THEIR CURRENCIES WITH GOLD?

To help combat the Great Depression. Faced with mounting unemployment and spiralling deflation in the early 1930s.

The U.S. government found it could do little to stimulate the economy. To deter people from cashing in deposits and depleting the gold supply, the U.S. and other governments had to keep interest rates high, but that made it too expensive for people and businesses to borrow.

So in 1933, President Franklin D. Roosevelt cut the dollar’s ties with gold, allowing the government to pump money into the economy and lower interest rates. “Most economists now agree 90 percent of the reason why the U.S. got out of the Great Depression was the break with gold”

(SOUND FAMILIAR?)

However, the U.S. continued to allow foreign governments to exchange dollars for gold until 1971, when President Richard Nixon abruptly ended the practice to stop dollar-flush foreigners from sapping U.S. gold reserves.

What’s the problem?

WEALTH CAN ONLY BE CREATED BY PRODUCTIVITY (GOODS/SERVICES)

Wealth is not just cash, cash is just one type of security used to hold wealth. There is also stocks, bonds, property, businesses etc.

Paper FIAT Currency is backed by a promise by goverments, basically like an IOU.

With governments Printing money like crazy and debts rising massively without the backing of real wealth creation…then the whole cash system can become worthless.

Like when hyperinflation occurred in Germany back in the 1920’s and more recently in Venezuela.

According to Ray Dalio, one of the greatest investors we are also coming to the end of the long term debt cycle.

Which basically means the methods we use to stimulate the economy no longer work & THUS A NEW CURRENCY has to be created…a return to hard money which is backed by gold!

Due to this and the fact that gold is a natural hedge during recessionary times many influential investors have predicted gold to rise to $10,000 per ounce!!

Historic returns of investing in Gold?

And it’s not just during recessions that gold prices have risen, they have been consistently rising from many years, through boom and bust.

Opposing views?

Warren Buffett is not a big fan of gold, due to fact that it doesn’t produce anything & pay’s no dividend.

FINAL THOUGHTS?

In the words of Ray Dalio “If you don’t invest into gold, you don’t know history”.

Which I do agree with to a certain extent and that it should be at least a small part of every investors portfolio.

Conversely, I also agree with Warren Buffett…with the fact that gold doesn’t produce anything and I would much rather own the equivalent amount of stock.

So gold only makes up a very small amount of my own portfolio, with the majority of mine in stocks of great businesses.

However, I do believe gold can be a great hedge against recession’s thus I may increase my allocation in the future.

How to invest into gold?

You can invest into gold, by purchasing the physical coins and bars however, this is very old fashioned and clunky.

I much prefer investing into gold using an ETF such as the

I SHARES PHYSICAL GOLD ETC (SGLN)

Looking at it’s past performance & expense ratio. (screen capture)

WHAT ARE YOUR THOUGHTS ON GOLD AS AN INVESTMENT?

COMMENT on the youtube video!