In a recent interview with host Eric Dye on the Entrepreneur Podcast Network, Philip N. Diehl, President of U.S. Money Reserve, outlined the reasons why Americans should buy gold now.
Diehl pointed out the rise of the “BRIC” (Brazil, Russia, India and China) countries have increased world financial volatility and uncertainty. And the economic success of their populations puts additional pressure on the price of gold. That’s because 65% of world gold sales come from China and India. The U.S. and Europe are relatively small players in this market.
He also pointed out central banks have been buying gold and will continue to do so to sustain the value of their reserves.
In the past few years, the U.S. dollar has strengthened against other major currencies. However, this trend is not sustainable. “What goes up, must come down,” Diehl pointed out. He cannot call the exact top of the U.S. dollar, but believes we are close to it now.
In its physical form, gold is more of a buy and hold investment. Unlike stocks, you cannot buy, sell, buy, sell. People who buy gold coins treat them more as a long-term investment, holding them as a form of insurance against future economic chaos.
At an economic forum in Colombo, Sri Lanka, financier George Soros said the current environment reminded him of 2008. According to an article about his remarks published on the U.S. Money Reserve website, Soros said China was struggling to find a new growth model and by devaluing its currency was transferring its problems to the rest of the world. Returning to rising interest was difficult for developing world countries.
Soros said, “I would say it amounts to a crisis.”
An article on Jaws Youth Fund points out George Soros sold his bank stocks and bought gold mining shares in 2014. Gold mining stocks come with a number of risks and problems. A company must find gold, buy the land, raise capital and then actually dig out the gold. It’s risky and capital-intensive. Average investors have no way of evaluating the prospects of the companies or their mines. It’s a game for experts and people, such as Soros, with the money to hire experts.
However, as Diehl points out, average investors can easily share in the profits of the coming price rise in gold by investing in coins. That’s especially true of the types of precious metal coins sold by U.S. Money Reserve. These are numismatic coins issued by the United States Mint. They used a standardized design, weight and mintage set by the U.S. Mint.