Gold, silver and Bitcoin are rallying this year. There is no hype behind this, but rather fear of a financial crash. Who will win the race?
What if the bill for the policy of “cheap” money comes one day? You can protect yourself against this to some extent with gold, silver and bitcoin, says nau.ch financial expert Stephan Lehmann-Maldonado. – Unplash
The most important things in brief
- Driven by China, the price of gold is racing from record to record.
- Silver is the metal of the moment: industry is hungry for it.
- Bitcoins in the portfolio provide additional independence.
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“Can you swim in the river?” I asked a local. I was traveling in the Bolivian jungle during the summer holidays. “No, because gold is mined in the area,” he replied. In recent years, the gold rush has broken out in Bolivia. Many mining cooperatives are looking for the new El Dorado.
In fact, the price of gold seems to be climbing from one high to the next. But in the shadow of its big brother, silver and the “digital gold” Bitcoin are also rising. Which of these crisis currencies will win the race?
Gold at the supermarket checkout?
Gold has been considered the metal of kings since time immemorial. It has maintained its purchasing power for thousands of years. 2,600 years ago in Babylon, a quarter of an ounce was enough to buy 88 loaves of bread. And to this day, you can get the same amount for it in Switzerland. In contrast, the “hard” franc has lost over 90 percent of its purchasing power due to inflation since the introduction of the Swiss National Bank in 1907.
Gold is considered the metal of kings and is therefore a popular investment. – Keystone
Various central banks and states are quietly increasing their gold reserves, especially China. The country is suffering from a real estate crisis, while Chinese stocks are stagnating. But some US states, such as Louisiana, Alabama, Utah and Wisconsin, are also once again recognizing gold and silver as a means of payment. They are even waiving taxes on the precious metals.
AI drives silver demand
Silver is an undervalued store of value. Unlike gold, it is still trading below its 2011 high. What is particularly exciting is that it is over 80 times cheaper than gold. This means that it is valued very low by historical standards – even though silver is the metal of the moment.
As an excellent electrical conductor, it is found in every photovoltaic system, in every electric car, in every cell phone. 60 percent of silver flows into industry. This trend is increasing in the age of artificial intelligence. It is hard to imagine that states would confiscate it, as has happened with gold on several occasions.
Trump promotet Bitcoin
Is Bitcoin about to beat gold and silver? Over half of the transactions of the thousands of cryptocurrencies are in Bitcoin. Its capitalization already exceeds that of silver. And presidential candidate Donald Trump is promoting it: “Bitcoin stands for freedom, sovereignty and independence from state coercion.” In fact, Bitcoin was created after the financial crisis of 2008 – as a symbol of resistance against the dominance of central banks. In contrast to tangible precious metals, however, it remains a digital formula.
Bitcoin is the world’s most popular cryptocurrency. – Pexels
Conclusion? Instead of hoarding cash, it makes sense to add some gold, silver and Bitcoin to your portfolio – as insurance for your finances. And if prices go through the roof, it is not forbidden to realize price gains! Maybe the proceeds will even be enough for an exotic trip. Inflation cannot eat away priceless experiences.
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About the author:
Stephan Lehmann-Maldonado has been collecting coins since he was a child and specialized in banking and finance during his economics studies at the University of Zurich. At the same time, he wrote for business media, taught as a business teacher and deepened his knowledge in banking practice. Today he runs an agency for clear communication – and is happy if the financial sector can also get on board with it.
Stephan Lehmann-Maldonado writes regularly on Nau.ch about finance. – zVg
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More on the topic:
University of ZurichDonald TrumpGold priceInflationFrancTaxesFinanceBitcoin
