How to Buy Gold Bullion

Why Buy Gold Bullion?

If the economy remains strong and inflation remains subdued throughout your life there would be no need for you to buy gold bullion.

But, there are signs that the economy cannot remain strong and vibrant forever. The major reason for financial uncertainty is that the United States has become dependent on other nations for our economic wellbeing.

Why are we no longer a financially independent nation?

Overspending and Manufacturing Loss

We have allowed manufacturing jobs to flow to low wage countries and our federal spending is raging out of control. Both of these factors work together to produce potential instability of our economy.

First, our federal officials have no understanding of financial responsibility. All the tax money the Federal government takes falls far short of it’s spending desires. It must borrow money in order to pay for all the programs it believes are politically expedient.

It seems every President has more spending plans than the previous President. The federal government must now borrow 42 cents for ever dollar it now spends. Much of that borrowed money comes from foreign countries that lend us money by buying our treasury notes. Two of the most important countries lending us money are China and Japan.

Since the United States has hemorrhaged manufacturing jobs to low wage nations for decades, the United States now buys most manufactured goods from foreign countries. Simply look at your clothing to see how many countries have manufactured the clothes you are wearing.,

Since 1980 our monthly trade deficits have almost continuously grown worse. We are spending $22 Billion more each month for Chinese goods than China is spending for US goods. Our overall monthly trade deficit runs well over $42 Billion.

Warren Buffett indicated that the foreign trade deficit is a bigger threat to the economy than the federal budget deficit.

Because of our loss of manufacturing jobs, the United States runs huge foreign trade deficits every year. And, a significant part of that money comes back to the United States as loans, purchasing treasury bonds or other debt instruments.

China, for example, loans the United States about $5 Billion every month.

But, the United States shows no evidence of getting its fiscal house in order. It neither shows willingness to reclaim its manufacturing jobs nor to bring its spending under control.

Deficits will expand for the foreseeable future. And, this means that the United States will probably never be able to repay its foreign debt, but will always be a borrower.

Eventually foreign nations must come to the realization that the bonds and other debt instruments they hold are practically worthless. They will realize that throwing good money after bad is not in their best interests. And, the United States government will have to fund its spending splurge in another way.

Financial Sanity Returns?

If the 42% of every dollar the federal government spends dries up, the government will have some hard choices.

One option is to reduce spending. Imagine 42% of government workers laid off, 42% reduction in Social Security payments, 42% reduction in road and bridge repairs. But, the picture is actually worse since defense and our foreign wars cannot be cut by 42%. So, larger cuts will have to be applied to non-essential areas.

Accepting reality and suffering for a time to regain financial stability is probably the best alternative. But, today’s politicians will probably not return to financial sanity.

The only other ways for the federal government to continue in its accustomed manner is through increased taxes and by printing more money.

There is a limit to how high taxes can be raised. Eventually, higher tax rates fail to increase tax revenues and cause an exodus of tax producing jobs.

Printing money will cause inflation and the loss of the dollar’s purchasing power. Can you imagine what a 20 to 40% rate of inflation would do to your living standards?

What Can You Do to Preserve Your Wealth?

There is little or nothing you can do as an individual to reform our federal government and its self-serving culture of big spending and expansion of power.

But, you can take charge of your financial future. You can help ensure your financial wellbeing by investing your money wisely in ways that inflation and economic instability will not have a detrimental effect.

The time-tested preserver of wealth has always been gold.

In times of financial instability you will want to tap into your supply of gold to convert it to the currency currently in use. While gold bars can be converted, smaller, well recognized gold coins will be easier to sell.

This is why we recommend that you buy gold bullion in the form of popular gold coins. When times get tough, you want your goal to be easily converted. Gold coins are your best choice.