Are you tired of worrying about the falling US dollar? Are you scared that its value will drop so low that redenomination will occur due to inflation? You aren’t alone when you feel this way.
It’s happened in parts of Europe, Africa, Asia, Australia, New Zealand, and other parts of the world. The US doesn’t have immunity. If inflation gets too far out of hand, the value of the dollar plummets and redenomination becomes a serious possibility.
How can you protect yourself if this were to happen? It’s relatively easy even though so many of us tend to overlook the obvious. You can begin cutting your exposure to the US dollar by investing in gold.
Before we get into the merits of initiating a gold IRA rollover, we will define redenomination first. Afterwards our readers will better understand the topic and clearly see the dangers it presents if it were to happen.
A Brief Explanation of Redenomination in Plain English
The goal of redenomination is to change currency. In particular, the process will change the value of currently circulating as coins and banknotes. And this process might happen for a number of different reasons that include:
- Inflation plays the biggest role in redenominating certain currencies. As an example, inflation might skyrocket in a particular country. Because of this, a coin or banknote might be so tiny that it no longer possesses any real value. So the small coin or banknote is no longer used and taken out of circulation. Only the larger denominations continue to remain in use.
- Redenomination could happen for other reasons as well. In fact, decimalization took place in countries that once used the pounds-shilling-pence system.
- It also happens in cases when countries form a monetary union.
A more recent example is the European Union. Certain countries in Europe came together to create a monetary union. So, the currencies previously used in these countries were redenominated and the Euro became the accepted currency. In fact, 19 countries in Europe took their existing currencies out of circulation and now use the Euro instead.
How Redenomination Can Hurt Your Financial Wellbeing
Before we begin, please note that redenomination isn’t necessarily bad or evil in every situation. But there’s one major area where it can negatively impact your retirement unless you have a precious metals IRA.
In some situations, a currency becomes so inflated that it goes through devaluation. This is what many Americans fear now. Many large countries no longer want their currency backed by the good faith of the US government. They feel that the US has too much power and they plan to take it back.
Guess what? Now that other countries have lost faith in America and the dollar, it no longer maintains the same value it once did. Plus, due to other factors the dollar’s severely inflated and it’s only a matter of time before the bubble bursts.
When you combine these two serious problems, you see the writing on the wall. You see that the US isn’t the major player it once was. You see that other countries are getting tired of their financial stranglehold over other nations. And you see that they are taking steps to release their country from the grip of the US dollar.
How the US Dollar Became so Vulnerable
It shouldn’t shock you to learn that the way to protect yourself from redenomination is to move away from the US dollar. Yes, it’s true. You no longer need to leave all of your eggs in one basket. In fact, it’s downright dangerous to do so.
Say the US dollar suddenly collapses out of thin air. What would you do to survive? You worked your whole life to build a nest egg for you and your loved ones. And now, through no fault of your own, it’s gone.
The hundreds of thousands or millions of dollars’ worth of banknotes you’ve saved have no value any longer. No one in America wants them because they are worthless. No one in other countries wants them because they aren’t worth the paper they’re printed on.
Why did this happen? It happened because in 1971 Nixon decided to take the US dollar off of the gold standard. Beforehand, every US banknote was backed by its equivalent in gold stored in a bank vault. Now the dollar is backed by “the good faith of the US government” which means less and less today.
Clearly, the US dollar is more vulnerable than ever since it came off the gold standard. But you don’t have to remain a potential victim.
The Only Way to Protect Yourself from Redenomination
Have you figured it out yet? We’ve dropped plenty of hints at this point. But to clear things up, the only way to protect yourself from redenomination is to buy gold.
Why buy gold you wonder? Well, there are a number of reasons that include:
- It’s really easy to buy and sell gold. You can buy gold coins and add them to your gold IRA account as an investment.
- You can test the content of your gold coins before buying. This gives you the ability to prove that your investment is real.
- It’s the only form of legal tender recognized around the world. If you need to relocate because of a potential disaster, your gold will be accepted no matter where you land.
- It’s a way to hedge your investments against inflation. In fact, when the US dollar goes down in value, the value of gold tends to rise. And vice versa. Owning gold during times of financial turmoil means increased value over time.
How to Begin Investing in Gold
Now that you see the value in gold, it’s time start investing. You can approach this a few ways that include:
- Opening a precious metals IRA. Once opened, you can begin buying gold and other precious metals and grow them for your retirement.
- Initiate a gold IRA rollover. This way you’ll gain the ability to invest in gold and other precious metals for retirement purposes.
- Buy gold coins and keep them at home. Not recommended because you lose the tax advantages of a self-directed IRA. You’ll also need a safe to store and protect them. And you’ll always worry about thieves stealing what’s rightfully yours.
Make it a point to learn about gold IRA investing. Knowledge is power. It’s the best way to create a safe and secure future for you and your loved ones.
Also learn about the current gold IRA custodians. Many have bad reputations. Some are known scammers. Others have been accused of fraud. Or take our word for it and trust our one and only recommendation.
Do you have any questions on redenomination or about how you can protect yourself from it with a gold IRA? Ask below!