Money

Gallup Poll Says Gold is Best Investment

In a recent Gallup poll, 28% of Americans named gold as the best long-term investment.  Real estate was second at 20%, followed by a tie for third place for paper assets like stocks and savings accounts at 19%, and bonds trailing last at only 8%.  The findings were reported as part of Gallup’s April update of its annual Economy and Personal Finance poll.

This could suggest that a lot of Americans have gold on their minds as they fret about the instability and uncertainty of other assets they hold.  When many give up on other assets in frustration, gold would be the most likely to benefit.

The Governments of the World Could Gradually Move Toward a New Gold Standard

An immediate return to a 100% gold standard is probably impossible.  What we’re seeing, however, is something more healthy and gradual – the birth of a few gold-backed paper currencies, here and there. 

Switzerland is probably the most gold-friendly nation on earth.  Bloomberg reported last week that Switzerland’s Parliament is now considering the launch of a new currency which would be directly linked to gold, a gold Swiss franc with a face value of five Swiss francs (now valued at about $5.25).  While the paper Swiss franc would remain the official currency of the country, the gold-backed franc would also circulate.

The Swiss franc has been the strongest currency of the “paper money” era, which began in 1971, when President Nixon took America off the postwar gold exchange standard.  Back then, the Swiss franc was worth $0.23.  Now, it trades at $1.05, more than a dollar, representing a 357% increase to the U.S. dollar.

The new Swiss gold-backed 5-franc note would be backed by 0.1 grams of gold. This would give the average Swiss family a chance to own gold cheaply.

U.S. States are also launching gold-backed State laws. As we have reported before, Utah was the first state to give legal tender status to gold and silver. Then, Colorado, Georgia, Idaho, Indiana, Iowa, Minnesota, Montana, South Carolina, Tennessee and Washington joined Utah in considering various gold and silver legal tender measures.  Now, Missouri joins the fold.  This month, the Missouri General Assembly is considering the passage of the “Missouri Sound Money Act of 2012,” which would make gold and silver legal tender in Missouri.

These measures will not suddenly raise the price of gold, but the continuation of gold-friendly state and national government acts will put a floor under the price of gold and lead toward a future gold standard between nations, if nations continue to abuse the printing press.  We can look for gold to surpass $2,000 if nations actually back some of their paper by gold, and then $5,000 or more if gold currencies become the norm in multiple nations on several continents – say, in India, China, Switzerland, Germany and resource-rich nations like Canada, Australia, Brazil, Peru, South Africa and other gold- or silver-producing nations.

Here in the U.S., the economic health may be more difficult to get a true handle on because of all the self-serving comments about the state of the economy from political parties in an election year.

But one thing we do know is that the real U.S. debt deficit is nearly four times what the government reports.  They say it’s $1.3 trillion a year, a staggering, incomprehensible burden in its own right.  But when liabilities for Social Security, Medicare and other retirement programs are taken into account, the deficit is actually running about $5 trillion per year.  Companies, states, and local governments must report retirement liabilities in their financial statements.  But Congress conveniently exempts the federal government from this requirement.  Regardless of the accounting smoke-and-mirror tactics by Washington, the money is still owed…period.

That means America hangs perilously close to a Euro-style sovereign debt crisis. The dollar has been strong against the euro and other fiat currencies, but only because it’s the best-looking horse on the way to the glue factory.

If a major economic/financial event is in the works, as investment wonks like Marc Faber predict, initially it could mean more volatility for gold as it gets temporarily pulled down in the undertow of panic selling and margin calls in the equity markets.  But a strong gold rebound would likely follow as gold reasserts in its safe haven role and is lifted by the probability of Fed intervention with QE3.  More liquidity points to inflation, and that’s good for gold. This could well prove to be a pivotal year for the global economy, world markets, and for gold.

Mike Fuljenz is the editor of the Numismatic Literary Guild (NLG) award-winning “Michael Fuljenz Metals Market Weekly Report,” and the numismatic consultant for First Fidelity Reserve. His award-winning radio show can be heard on KLVI News Talk AM 560 from 6 p.m. to 7 p.m. CST on the last Monday of the month.

Read more articles by Mike Fuljenz

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13 Comments on "Gallup Poll Says Gold is Best Investment"

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Betty
3 years 8 months ago

When President Franklin D. Roosevelt needed money for the Second World War he sold War Bonds to the American Public. These bonds could be purchased in small amounts (25 cents stickers pasted in a book could buy a $25.00 bond) -. Or for the rich people $25, $50 or $100 and up for cash. These bonds were advertised in the movie theaters (no TV at that time). Why borrow from China when we Americans can support ourselves. Pay the debt down that way. And stop the spending spree in Washington.

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3 years 11 months ago

gold is important things for my idea . It is a valuable things that why people collect gold .

Ed Straub
4 years 3 months ago
Revelation 18:17 in one hour so great riches is come to nought. And every shipmaster, and all the company in ships, and sailors, and as many as trade by sea, stood afar off, James 5:3 3 Your gold and silver is cankered; and the rust of them shall be a witness against you, and shall eat your flesh as it were fire. Ye have heaped treasure together for the last days. Do you trust in your riches, in the “Last days”. It’s really foolish! Consider the times we live in and see what is the solid fact, we will soon see the advent spoken in the Bible as the “Last days”, “the Day of the Lord” it’s here and you need to trust in Jesus Christ and Him alone. It’s nice to have extra money, food, clothing, but that will not give you Eternal Life. Romans Chapter ten tell us… Read more »
Stan
4 years 3 months ago
Ed, thanks for your comments. Please keep in mind that the Bible nowhere condemns wealth in and of itself. LOVE of money, ill gotten gain, trust in riches instead of trust in God, these are all sinful. Gold and silver are given by God, but their use is too often perverted by man because of the sin nature. If you want to be a faithful steward of His resources, you have to have the resources to begin with. Be sure to read the warning of Deuteronomy 8. We have a government that wants to replace the Almighty with itself. As a result, we have an obligation, as good stewards, to protect what He has given to us. Hopefully, our focus will be on Christ and on other people, using money to spread the Gospel and to help others. Gold and silver are good vehicles to protect against the ungodly policies… Read more »
Tim
4 years 3 months ago

Patricia,

Right now I’m buying through some on-line companies. I’m buying ingots (by the ounce), not coins (since I know nothing — and don’t want to learn — about coins.

What I know nothing about is how to “cash” them in. Right now about the only way to do that is to sell back to the on-line companies or via Pawn Shops which charge you a healthy discount, so unless you are way ahead on a buy-to-sell basis (say 20%), selling appears to be difficult at this time. I guess I should look at how Utah is managing these transactions (or how Idaho is proposing for the future).

Martha
4 years 3 months ago

Hi, GoldMoney.com is one way to buy precious metals, and have them stored for you. It is easy to sell if needed, as I have done, and have the money deposited into your bank account. You actually own so many grams or ounces, but avoid some of the problems of storing and selling.

Occam's Tool
4 years 3 months ago

@Tim: check out buying through the US Mint. Myself, I buy proof coins. It should be pointed out that when FDR confiscated gold, he did not confiscate coins with “collector value,” and the Mint prices within a few hundred dollars of bullion price for a coin with a chance of escalation above bullion price. Shipping is also VERY reasonable. I have no interest financially in the advice I just gave.

TonyR, Lafayette LA
4 years 3 months ago
I would look for gold and/or silver “rounds” in various weights, instead of ingots. A round which is not a coin might be easier to trade for goods if the economy tanks. Retailers might be more willing to accept a 1/4 ounce gold or silver “round” which has its specified purity and weight stamped on it than an ingot. As for coins, if you purchase United States gold or silver “Eagles”, you must remember that the U.S. government has made them “Legal Tender” meaning that if you bought a 1 ounce silver Eagle at whatever the going price is for one ounce of silver and the economy collapsed and you wanted to use that one ounce silver “Eagle” to buy bread at the bakery, the baker will see stamped on the silver “Eagle” the words ONE DOLLAR and Legal Tender. Most retailers will be unfamiliar with precious metals and may… Read more »
Patricia
4 years 3 months ago

What is the best way to invest in gold?

Paul
4 years 3 months ago

Patricia – there are a lot of ways to buy gold but I’d start with the following for the smartest ways to get started:
1) pick a national/reputable dealer, BBB accredited, won awards, involved in the gold/coin industry, published, interviewed by major news and financial publications etc.
2) determine the types of gold you think are best for you (saving for retirement? look at a gold ira) (want bullion – look at gold american eagles) (rare gold coins are good to insulate you from swings in bullion and give you collector demand value)
3) make sure you have service and product guarantees
Hope this helps

Stan
4 years 3 months ago
Patricia, I started buying gold back during the Carter years (same hysteria as today) when it was selling for a bit less than $300 per ounce. I have always purchased at a reputable coin dealer in a state that does not charge sales tax. It is best to buy with cash so that the government does not know about it (not to avoid capital gains tax, but to avoid illegal confiscation), and so that nobody else knows about it (robbers included). My preferred type of gold is one ounce bullion coins (American Eagles, Canadian Maple Leafs, Dutch Krugerrands). These coins are easily recognizable and easy to sell back to a dealer, who will pay spot price plus a small premium. Be sure to know the spot price before you sell so that you will not be cheated. If the dealer is reputable, you will not be cheated. The reason for… Read more »
Michael G
4 years 3 months ago
Gold has no value except what someone places on it. If there would be a cataclysmic event where our current monetary system went under, people would not turn to gold as a medium of exchange. After hurricane Katrina in New Orleans, the most valuable thing wasn’t gold, but water, gas and food. These commodities were like gold in that they were in short supply, wanted by everyone, and the economy for the first few days and weeks revolved around them. People didn’t say, “I have no food or water, but thank goodness I’ve got my gold to live on.” People survived, not on gold, but through barter and giving others a helping hand. Gold is a lousy long-term investment. Over the past 70-80 years it has averaged around 4% per year. Most of the gain in gold has been in the last 7-10 years. Gold will go back down as… Read more »
Tim
4 years 3 months ago

Patricia,
Right now I’m buying through some on-line companies. I’m buying ingots (by the ounce), not coins (since I know nothing — and don’t want to learn — about coins.
What I know nothing about is how to “cash” them in. Right now about the only way to do that is to sell back to the on-line companies or via Pawn Shops which charge you a healthy discount, so unless you are way ahead on a buy-to-sell basis (say 20%), selling appears to be difficult at this time. I guess I should look at how Utah is managing these transactions (or how Idaho is proposing for the future).

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