These days, at Costco, it seems like you can get whatever you need for the Zombie Apocalypse. A savvy shopper can purchase anything from a massive bulk pack of toilet paper they can barely fit into the trunk of their car to solid gold bars.
I’ve long written about the importance of putting some of your savings into precious metals, and for ages, it seems to have been a secret kept close to the vest in prepping circles and for the extremely wealthy. But now, even Costco has caught the gold bug, and shoppers are responding fast, leaving the bars sold out within hours of being listed.
In a quarterly earnings call last week, Costco chief financial officer Richard Galanti told investors that the bars have been flying off the shelves, reported CNBC, saying, “I’ve gotten a couple of calls that people have seen online that we’ve been selling 1 ounce gold bars. Yes, but when we load them on the site, they’re typically gone within a few hours, and we limit two per member.”
And it certainly makes sense to buy gold (or silver) because the banking system is so volatile it really cannot be trusted. I don’t believe for a second that our system as it is right now will last much longer. Sure, there’ll be a new system to replace it, but you can darn well bet that WE will not be the ones who benefit from it. In fact, I strongly suspect that the new system will be CBDCs (Central Bank Digital Currencies) and all the surveillance and control those entail.
Why are so many people buying gold?
According to the experts, it’s all about a feeling of uncertainty. And given the abnormal circumstances the United States finds itself in, that’s the most normal response in the world.
Jonathan Rose, CEO of precious metal broker Genesis Gold Group, says that recent bank failures, inflation and individuals’ concerns about the U.S. dollar, for example, can cause some to start looking for alternative places to park their money.
“If someone’s going out to buy gold, that means they think that there’s some type of instability at the structural level of the market and/or the government itself,” added David Wagner III, head of markets and equities at Aptus Capital Advisors.
Not all advisors love the idea of investing in metals. First of all, the value is something that can change rapidly. When you buy gold or silver, you should go into it knowing this fact.
But this can actually be to your benefit. According to USA Today:
The value of precious metals has been on the up and up for the past five years, with gold rising from roughly $1,200 an ounce in 2019 to $1,825 as of Tuesday, according to CNBC market exchange data. It spiked at $2,026 an ounce in April of this year.
So if you bought gold five years ago, you made a heck of an investment.
Of course, the value can also go down and that’s why you should never invest more in gold and silver than you can afford to hold onto. The price will eventually go back up.
Buy now before the price goes up again.
Of course, that does depend on making your purchases before gold reaches a peak price. You want to get your metals before the price skyrockets.
And luckily, you don’t have to wait for it to be back in stock at Costco. You can hit up my friends at ITM Trading and schedule a free strategy session to see if this is a layer of financial preparedness you wish to add to your current plan. Then you’re able to ask questions of professionals who have your best interests at heart. Education is a huge part of what they do, so I definitely advise taking advantage of a free, no-obligation call.
What causes the price of gold and silver to go up? Basically, everything happening in the world right now. A huge part of the value of gold is psychological expectations and fears about the economy. But more practically, Money.com lists the following as reasons you can see this safe haven explode in value:
The current value of the US Dollar
A demand for gold
A demand for gold exchange-traded funds (ETFs)
Demand for industrial applications
The cost of gold production
Gold is also more highly sought during times of inflation as people look for a way to maintain the value of their savings. According to the same article, gold is considered to be the epitome of a safe-haven investment because when everything else goes down, gold goes up.
A safe-haven investment is an investment that has no correlation or a negative correlation with other markets. For example, gold is often seen as a safe haven because it tends to move in opposition to stocks and bonds, thereby serving as a hedge against losses in those asset classes.
So if you are expecting bad economic times ahead, the sooner you invest in gold, the lower the current price will be, and the better off you will be in the long run.
When should you NOT buy gold?
If you aren’t prepped with physical items, gold may not be the right investment for you. Precious metals aren’t really something to use during the SHTF. They’re something to hold onto throughout it so that when eventually, society reemerges, you have something of value for starting over, paying for repairs or taxes, and not being totally without assets.
As I’ve written before, you should layer your financial preparedness with:
A financial foundation: This is simply the act of good financial common sense: paying off debt, having an emergency fund, and controlling your budget.
Tangible essentials: This is where prepping comes into play – the next layer is having essential supplies like food and other preps, learning skills, buying tools, taking care of medical and dental problems
Financial assets: Only after you have the first two layers in place should you tackle the bigger picture. If you’re in good shape, this may be the time to purchase things like precious metals. This is not money to spend – it’s a unit of storage for the wealth you have accumulated, whatever that may be.
If you don’t have the first two layers in place, it’s fine to make some small precious metals purchases, but you save the large investments for later, once you have these things under control.
The debt bubble is bursting.
People are barely holding on financially. In the first half of this year, consumer bankruptcies were up 17% over the year before. Total household debt has reached a dizzying $17.06 trillion, and credit card debt is a trillion of that. Delinquencies and defaults are also climbing. Why?
“The increase in delinquencies and defaults is symptomatic of the tough decisions that these households are having to make right now — whether to pay their credit card bills, their rent or buy groceries,” said Mark Zandi, chief economist at Moody’s Analytics.
If it’s a choice between a credit card payment and your child going hungry, what would you do? I would buy the groceries, too. And also, I believe part of the reason that debt is so sky high is that people have been using credit cards to pay for essentials like gas and groceries because as rents, inflation, and interest rates keep moving into the stratosphere, there’s just no money left.
I hate to sound depressing, but our economic future does not look good.
Whatever your plan is to protect yourself financially, you need to stop waiting and enact it. Every day you wait, you’ll get less future bang for your current-day buck.
Reprinted with permission from The Organic Prepper.