Gold Bullion IRA – Is It The Right Investment for You?


In the choppy market of today, you may have found yourself wondering whether you would be better off investing your portfolio in something other than things like stocks and bonds. Not only are the markets unpredictable, but there is a great deal of political uncertainty both in the United States and in the world. The current presidential administration has often been characterized as hostile to business, and this has prevented many businesses from making the investments that they need to remain profitable and prosperous. There is also a great deal of fear surrounding the seemingly unlimited supply of fiat paper currency that is continually being issued in both the United States and in Europe. It seems as if it is only a matter of time before inflation arrives to severely hurt the pocketbooks and portfolios of individual investors. In an environment such as this, you may have considered that a gold bullion IRA may be the best investment choice for you. Before you reach this decision, there are two major questions that you first need to be able to answer definitively. First, is gold the best investment right now? Second, is an IRA account the best investment vehicle for gold? Let’s first take a look at whether gold is a good investment right now.

Gold has been used by humanity for money for millennia. To understand why this happened, it is important to understand the nature of money and why gold was selected as the dominant currency of humanity. For a commodity to be useful as a medium of exchange, it must possess several characteristics. First, it must be relatively scarce. If a currency is easily reproducible, then it inevitably leads to hyperinflation and the ultimate destruction of that currency. This was the case in colonial Virginia when tobacco leaves were used as money. Rather than focusing on producing other goods, people quickly figured out that they could simply produce tobacco to trade. Soon there was an oversupply of tobacco leaves, and the money quickly lost most of its value. This has also been the fate of every single government-controlled paper money throughout history. Perhaps the United States will be the first nation in the history of the world to not completely demolish its paper currency, but the odds are not on their side. Another characteristic of money is that it must have had some usefulness in the marketplace before it evolved into the dominant medium of exchange. This is why most paper monies today evolved out of the gold and silver standards. It’s impossible for a money to simply be introduced without first being attached to something that already has value in the market, otherwise no one will know how to price their goods and services in terms of it. Two other important characteristics of money are that it must be easily divisible and it must be relatively durable. Eggs, for example, would not make for a good medium of exchange because they are too easy to break. Finally, it is the divisibility factor that has made metals like gold, silver, and coper preferred as money. These metals can be easily divided into small units, like coins, and then melted back together into bullion.

Because of these factors, gold will always be a preferred form of money, until the alchemists finally succeed in their quest to turn lead into gold. There is no guarantee that it will gain in terms of Dollars or Euros, but you can be relatively certain that it will retain its value no matter what happens in the political and economic worlds.

Now that you are secure in your decision to buy gold, is a IRA account the best vehicle? The main disadvantage of a gold bullion IRA is that the government will easily be able to seize your gold if it decides to follow such a policy in the future, as it did in the 1930s. An alternative is to hold onto the physical bullion yourself in a safety deposit box.

This post was written by

jason – who has written posts on Budget Clowns.
Father of three and married to a lovely women. Always looking for ways to save money, and invest it properly for my children's future.

Email  • Google + • Twitter

Comments are closed.