Bloomberg Calls Gold the “Obvious” Investment for Protecting Your Wealth
According to Bloomberg’s latest Markets Live Pulse survey, more than half of finance professionals said they would buy gold if the US government fails to honor its debt obligations.
If you’re unfamiliar, the debt ceiling is a limit set by the U.S. Congress on the amount of debt that the government can legally borrow. The government can issue bonds and other forms of debt to finance its operations, and the debt ceiling sets a maximum amount that the government can borrow.
If the U.S. government were to default on its debt, it would mean that it would be unable to pay its creditors on time or in full. A default could lead to a decline in the value of the U.S. dollar, and a loss of confidence in the U.S. government’s ability to manage its finances.
If the U.S. government were to continue to raise the debt ceiling, it would be able to borrow more money to finance its operations and meet its obligations. However, there are concerns that continually raising the debt ceiling without addressing the underlying causes of the debt could lead to a debt crisis in the future.
A debt crisis could lead to even higher inflation, higher interest rates, and a sharp decline in economic growth.
In the end, both scenarios could be bullish catalysts for gold. So, it makes sense that many investors are shifting their focus to gold as they look for safety and stability in today’s uncertain economic climate.
Gold: No Longer a Fringe Investment
It’s a major asset class that millions of new people are waking up to…
Roughly 26% of Americans view gold as the best long-term investment, according to a Gallup poll in April among 1,013 American adults.
Since 2011, Gallup has polled Americans’ perceptions of the best investment among five major asset classes annually as part of its Economy and Personal Finance poll, conducted each April.
This year, you can see many people’s perception of gold is changing.
Gold has overtaken stocks as the second most popular long-term investment among American investors, trailing behind only real estate.
What’s more, interest in gold has surged by about 50% compared to last year’s levels, as investors look for safety and stability in an uncertain economic climate.
According to the World Gold Council, central banks more than doubled their gold buying in 2022, and American investors bought 32 tons of gold in Q1 of 2023 – the highest quarterly amount since 2010.
As Americans continue to struggle with the rising cost of living, and the U.S. faces recession threats and a debt ceiling crisis, it will be interesting to see how this newfound interest in gold plays out.
BRICS Nations Expanding: Bad News for the U.S. Dollar?
Brazil, Russia, India, China, and South Africa…
Not only are the countries in the BRICS alliance among the world’s fastest-growing emerging markets – but the BRICS alliance might be expanding.
On June 2-3, all five nations are meeting in South Africa to discuss adding several new nations that have formally applied to join them:
- Algeria
- Argentina
- Bahrain
- Egypt
- Indonesia
- Iran
- Saudi Arabia
- United Arab Emirates
Other countries forming trade agreements isn’t new. But what is different here is that now many of these emerging economies are creating trade agreements specifically to avoid using the U.S. dollar.
And they’re not alone – many new countries have expressed interest in joining BRICS too…
- Afghanistan
- Bangladesh
- Belarus
- Kazakhstan
- Mexico
- Nicaragua
- Nigeria
- Pakistan
- Senegal
- Sudan
- Syria
- Thailand
- Tunisia
- Turkey
- Uruguay
- Venezuela
- Zimbabwe
As these countries band together, some of them openly hostile to the United States, it begs the question: how will the U.S. respond to this threat to its global leadership?
For decades, the dollar has reigned supreme as the reserve currency and the US has been the dominant force in international trade. Politicians in the U.S. have abused the privilege of having the world’s reserve currency, and now the rest of the world may be starting to turn their backs on the US dollar standard.
With the rise of these new players, the balance of power could be shifting.
How Can Investors Protect Themselves?
No matter what happens with the dollar, you need to make sure you are protecting yourself – and the best way to do that?
Gold.
History shows time and time again that gold can help grow and preserve your wealth during times of crisis. If you’re looking to make that first-time gold purchase, open an account today, or log in to check your holdings and see if you have enough ounces for the road ahead.
