Why Gold Makes More Sense Than Ever
One of the reasons we are advocates of holding physical Gold and Silver outside the banking system is the instability within the overall global financial system. There is a recent article by Sovereign Man that highlights the tremendous risk that is present in the global economy.
According to the article, the Federal Reserves balance sheet has exploded from $800 billion in 2008 to $4.5 trillion in 2014. Despite QE coming to an end in the US, it looks as though the Fed’s balance sheet remains at evaluated levels.
It brings into question the solvency of the Federal Reserve. With other major Central Banks pursuing the same policies, it highlights the truly unprecedented environment that the global economy finds itself in.
What happens when the next crisis hits? Can the Central Banks respond effectively with balance sheets already near all time highs. It seems as though debt does not matter any more, but history tells a different story.
The link to the full article is below. While the article focuses on the Fed, the Central Banks of Japan and Europe are likely in similar positions.
Is the Global Economy Near a Tipping Point?
The amount of bearish news stories about the global economy appears to be increasing significantly. The challenge is to remain objective and not to over-react one way or the other.
As Simon Black says in the above article, no one has a crystal ball and is able to predict how long this debt cycle will last or what the ultimate outcome will be. However, the likelihood of some type of shock seems inevitable.
There is a reason why the Central Banks are unable to step back and let the global economy function on its own. And now we could be approaching a period where the next crisis is bigger than the Central Banks ability to respond.
Having some physical Gold and Silver stored outside the banking system is a good way to insure one’s financial health. By doing so you know you have taken an important step to protect your assets.
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