Many investors know that it is good to buy gold and silver in order to protect against various crises. But how much protection you can buy by investing in precious metals? It is really possible that this hedge could hold up even during stock market crashes or total U.S. economic collapse?

A total U.S. economic collapse or even a global economic collapse has become much likely than ever. Experts predict that stock, bond, and housing markets are now in for a big fall. The effects of this now forming “everything bubble” will be devastating when it bursts. The crash will push most investors into precious metals such as gold and silver.







Since the last financial crisis in 2008, house prices across markets such Canada and Britain have surged. Market analysts believe that these prices are set soon for a correction. Inflated stock and bond market are signaled by several pointers. For some market experts it has become clear now that a crash or even a total U.S. economic collapse is fast approaching.

Money printing measures used by some central banks in Europe, Britain and the U.S. will make the next crash far worse. Something dangerous and big is coming at us. And it’s going to hit us very fast. The problem is that many people are not being prepared as much as possible.

It was stocks back in the year 2000. It was real estate and stocks back in 2008. This time will be an “everything bubble” including bonds, real estate and stocks. This can lead to a total U.S. economic collapse. Current circumstances will make this the biggest bubble of all times. The U.S. economic collapse is going to have devastating effects for most people. However, with the right precautions and preparation in place, it doesn’t have to be devastating for you too.

Some investors are worried about the obvious precarious situation of the market but they hold a common assumption that in case of economic collapse gold price will also fall right along with the market. Won’t be better to wait buying gold till the dust settles if that’s the case?

Before being able to formulate a realistic hedge strategy, we need to take a look first at price data from some stock market crashes in the past.







The History’s Message

If we take a look back at past market crashes, we can measure the performance of gold and silver during each of them. This way we can notice the historical tendencies. During the eight biggest S&P 500 declines over the past 40 years, we can see the way gold and silver prices responded to each.

Here are the main conclusions we can draw from the historical data:

Gold price rose during the stock market crashes in most cases. The only significant selloff of gold occurred just after the biggest gold bull market. During stock market crashes silver did not fare so well.

From all this data we can conclude that gold price is acting opposite to stock market. When the stock market crashes gold price increases. The reason why during stock market crashes gold tends to be resilient is that the two are negatively correlated. This means that when one goes down the other one tends to go up. If you think from about it, this makes perfect sense. Gold benefits from economic crisis and distress, while stocks benefit from economic stability and growth.

For the reason above, in case that the stock market falls or we experience a total U.S. economic collapse, investors usually seek safe haven in gold because fear is going high. In case that stocks are doing great, the mainstream investors perceive a low need for gold.

From all the data analysis above the practical advice for investors is to invest in gold if they want an asset that will rise even when most others will fall. In a big economic collapse, history shows that gold is likely to be perceived as a safe haven. So, if you know that the economy is headed for a big crash, then it’s time to plan owning a lot of gold.

Your best strategy as an investor is to protect in time from what’s possible to happen when markets are hit with extraordinary volatility. In light of all the risks we currently face, it’s wise to buy a meaningful amount of physical gold and silver. A stash of bullion set aside will protect your wealth in case that the next crisis sends gold off to the races.







Invest in Gold

Gold has always been considered something of great value throughout time. It was used by Egyptians as early as 2600 B.C. It has been already used as a form of currency by 1500 B.C.. Gold has been used in symbolic religious artifacts and by a number of religious ceremonies, being also mentioned throughout the Bible.

Because of the 2008 stock market crash, inflation fears, the foreclosure crisis, and a general lack of trust in government, the popularity of gold has seen a resurgence. Only in the last decade, the price of gold has jumped over one thousand dollars. Many investors have already shift into gold a good portion of their investment dollars.

Many investors have bought gold just as a regular investment. However, there are also people who are buying gold as a precaution to ensure their financial security, fearing a total economic collapse. In an economic collapse situation, gold could be, indeed, very valuable.

While the value of fiat money will depreciate fast in a post-collapse world, trade will continue by means of barter and based on precious metals such as gold and silver. Other commodities will be also very precious in such a post-apocalyptic scenario, including water, food, clothing, bullets, weapons, shelter, and land.

If you decide to buy gold, make sure it is physical gold stored outside the banking system. Investing in gold exchange traded products is not such a good idea, unless you have physical gold in your hand. Contracts, stocks and all paper currencies will become useless if the entire economic system collapses. Only real physical gold can hold its value.





