from The Sovereign Investor:
I get this question all the time from people: Why should I bother owning physical gold or any other precious metal like silver or platinum?
What’s my answer? I tell them owning precious metals is an insurance policy, plain and simple. And with central banks doing what they do best — dropping interest rates down to zero and putting the money printing presses into overdrive — boy, do we need some insurance these days.
Think about it. Let’s use another kind of wealth protection — fire insurance — as an example.
Records from the National Fire Protection Association tell us that, back in 1977, there were more than 723,000 house fires. A decade later, thanks to the increasing use of smoke alarms and flame-retardant building materials, the incidence of such blazes fell by 25% to 536,000 house fires. Nearly four decades afterward, and the number of home fires continues to decline by nearly 50%.
Yet we continue buying fire insurance for our homes (and renter’s insurance if we’re leasing). Why? After all, the odds of having a fire are lower now than they’ve ever been.
Our reason can be boiled down to three words: Just in case.
Gold Is Wealth Insurance
We don’t know when a stove might be left unattended just long enough for a grease fire to start. We don’t know when a bit of electrical wiring might short out, sparking a blaze inside of a wall.
That’s what insurance is for. Our homes are a valuable asset, and we want to protect them.
But what about protecting the rest of our wealth-related assets?
That’s why precious metals like gold, silver and platinum command our attention in these uncertain times. Perhaps that’s why a number of central banks around the world have sharply stepped up their purchases of gold bullion.
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