Gold in Times of Crisis | The Gold Standard #2209

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Just when you think there couldn’t be another crisis, a new one appears. More than an unpredictable economic outlook, with Russia’s invasion of Ukraine, the world has become a dramatically more dangerous place. The time to be defensive with your buying power and privacy is here. Gold proves itself to be insurance against inflation and a geopolitical crisis asset.

Unlike gold, markets become wildly unpredictable during times of crisis because Wall Street has a low tolerance for uncertainty. Downward trends continue during climates of fear. For example, the stocks on Wall Street have been negatively impacted since Russia began its invasion of Ukraine. The S&P has lost about ten percent since the beginning of the year. The Nasdaq has lost a bit more. Overall, the markets have been declining more than advancing lately.

Before Russia’s attacks on Ukraine began, stocks were already stumbling. Russia’s invasion of Ukraine will make matters worse for the general economy and the markets. There is still considerable rhetoric about the accelerating US economy. Still, as the cracks begin to show, growing uncertainty will continue to take its toll on Wall Street.

These are worrying times, and the mounting concerns go deeper than tumbling stocks. This episode will help you start thinking of things you can do to prepare.

Keep in mind that everyone’s situation is unique. The conventional wisdom of having no more than ten percent of your paper assets in precious metals. Traditional recommendations are not that useful during times of crisis. Considering the number and magnitude of risks today, people should consider having more gold than usual.

Persistently high inflation is just one of the problems. The more significant point is that these problems will not resolve quickly. The ability to ride out multiple crises will become increasingly critical.

Gold comes from the Earth and cannot be manufactured, and therefore, free from hyperinflation worries. Throughout the history of humankind, gold and silver have been the primary medium of exchange. These precious metals have survived the collapse of many governments. People in finance always refer to gold as a hedge against inflation. Still, it’s true protection against our greed and ambition.

There’s an emotional and spiritual association with gold. Gold embodies divine qualities. Gold has a shine and malleability, and indestructible nature. The color and luster of gold are symbolic of acquiring knowledge, wisdom, and faith. These are the most valuable commodities that benefit us more than anything. These are actual commodities the world needs now.

Against the backdrop of the Vietnam war, the spot price of gold rose from thirty-five dollars per ounce in 1970 to one hundred and eight dollars in 1975. Just another five years later, in 1980, gold climbed even higher to eight hundred and thirty-seven dollars.

People from old countries know that when governments are in turmoil and the economy is in free fall, the government’s currency becomes useless. The Vietnamese come from a culture of saving physical gold. They know, from experience, that gold holds their purchasing power and that it’ll always be there when they need it. As the war progressed, it became clear that Saigon would soon fall to the communist; ordinary Vietnamese citizens relied on gold for survival. Even as the fighting wanned, Vietnamese people never put their currency in banks. Instead, they continued their tradition of converting their currency (the dom) into physical gold and hiding it at home. They had no idea what the future would bring, but they knew gold would always be valuable, even during catastrophic cataclysmic events such as war. The refugees fleeing their homes knew that only gold would buy them a ticket out.

The collapse of local currency is one of the symptoms of unstable governments and countries caught in the crucible of war. Thousands of Vietnamese citizens relied on gold to help them escape the communist. Today, we’re seeing a variation of this same story being played out again.

The Valcambi Gold CombiBar was first introduced in this series a while back, but, as Dave Deno points out, the usefulness and practicality of Valcambi’s Gold Combibar have renewed significance now. Every day we hear how Ukrainians queue up in long lines hoping to get some of their cash out of ATMs.

The Valcambi Gold CombiBars are an essential ingredient for survival in desperate situations. The size of a credit card, but resembling a gold-wrapped chocolate bar, the 50-gram Gold Valcambi CombiBar is quickly snapped into one gram pieces to be used as money during times of crisis. Think how convenient they would have been for the Vietnamese fleeing their homeland after the fall of Saigon. The Gold Valcambi CombiBar will be especially useful during times of emergency, strife, and unpredictability.
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