Why Gold is a Must in a Banking Crisis

There are many reasons to buy and hold physical gold…

Bullion.Directory precious metals analysis 18 April, 2023
By Stefan Gleason
President of Money Metals Exchange

The lack of counterparty risk, the diversification, and the hedge against inflation are among the top reasons to own the monetary metals.

The public is only in the early process of figuring out why gold ownership is an absolute MUST during a banking crisis. Several big banks have already failed. Silicon Valley Bank had nominal assets of $209 billion. Signature Bank of New York failed with nominal assets of $118 billion.

These banks became two of the nation’s top three failures in history!

The only larger one was the ignominious 2008 failure of Washington Mutual which had assets of over $300 billion.

Meanwhile, many other banks may be overleveraged and – despite new liquidity “tools” created by the Federal Reserve – may ultimately be unable to cope with a rush of depositors looking to yank their deposits.

The world may also be set heading toward negative scenarios, as concerns about a global recession and even a global war are rising.

Consider, for a moment, what it could mean to you if your bank closed down.

What if you were unable to pull cash to go to the grocery store, buy gasoline, or heat your home? Or what if you were able to get cash, but discovered that cash was now nearly worthless?

Both scenarios are possible – and may now be becoming more likely.

The impetus for holding non-bank forms of money may never have been higher in recent history. Fortunately, doing so is not difficult.

Gold is a great substitute for Federal Reserve note “dollars” when it comes to longer-term savings – in fact, holding gold is an upgrade.

Gold is valued, traded, and hoarded all over the globe. And central banks have recently been acquiring gold at record pace.

Over time, gold goes up and down – and mostly up. While fiat currencies go up and down – and mostly down.

It’s prudent to diversify away from holding large amounts of Federal Reserve notes or their electronic equivalent. From an ease of transacting standpoint, it’s highly practical to hold some dollars. But the risks may outstrip the benefits as you get into larger amounts.

Bank fears combined with inflation fears has sparked a major increase in demand for physical gold (and silver) over the past six weeks.

Money Metals has already seen buying volume more than double – and it does not seem to be slowing down.

Don’t let slight delivery delays or “paralysis of analysis” lead to inaction. Those who have acquired a meaningful holding of physical precious metals may sleep easier when the next phase of this ongoing crisis of confidence unfolds.

This article was originally published here

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