You don’t need complicated economic algorithms to understand one simple fact…Europe is on a downward spiral.
Spain, Ireland, Greece and Portugal are all calling for outside help. Europe can easily help one country, but when one country becomes many – Europe won’t even be able to help itself.
What Does This Have To Do With Gold?
Gold has proven to be a reliable safe haven for investors for many years. When major economic issues occur in the world, we see time and time again how easily gold explodes. It won’t take much for gold to see another quick jump of $200 to $300 per ounce, and Europe’s financial situation may give way to this.
Remember, gold is very much driven by fear in the marketplace. When the stock markets across the globe are in trouble, most savvy investors run to precious metals to secure their wealth. Companies and banks are not immortal. Market changes, economic changes, or even changes in ownership can cause a company or banking institution to go bankrupt. Thus the question arises – would you rather invest your money into companies and banks, or something more stable? Now with Spain’s recent decline, Europeans are facing this very question.
Gold and silver will always have a value and they have never gone to zero. This simple fact alone is a major reason why the wealthy entrust their money in this special yellow metal. The ability to convert your paper assets into a stable form of currency that will always have a value is very useful indeed. Furthermore, inflation typically means gold performs even better.
Europe In The Coming Months:
Spain’s 10 year bond yields rose above the magical 7% mark this week. This was the same turning point that forced Greece and Ireland to ask for outside aid as well. Spain is reported to need about $125 billion from its fellow countries to help save its banks.
Clearly this places Europe in a tough position. Do we invest in our neighbor in hopes that they change their ways and turn around their economic crisis? Or do we allow them to falter and sink further into the mess they have created which may in turn harm the European Union. Powerful countries like Germany are more apt to allow Spain to lay in the mess they crated.
Regardless of the outcome, we can be certain about one thing – Europe is looking to buy much more gold than ever before. Instability causes the natural reaction to want stability. It’s no wonder overseas investors are turning to gold to help solve this issue.
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American Bullion specializes in adding gold and silver to retirement accounts. If you have a question or would like to know more about your investment options, please call American Bullion at 1-800-326-9598 to speak with a precious metals specialist.