A Perfect Storm for Dollar BugsMay 12 • Categorized as Investments
by Knut Andersen, Swiss Metal Assets
Just about everyone today is aware that holding fiat currency as a store of value is a lousy idea. While this is true of most modern currencies, those holding US dollars may feel particular concern with the rapid rate of depreciation in real terms against almost all major currencies and precious & strategic metals. Ever since the break-away from the gold standard in 1971 the US Dollar has been in a relative free fall only steadying periodically during global recessions when the greenback is looked to as a defensive strategy by many foreign governments.
Based on current available data, the US dollar has seen a 40% decline between 2002 and 2008 alone. In other words, if you went to bed one night in 2002 with US$100,000 hidden under your mattress and did not awake until 2008, your US$100,000 would only have the purchasing power of around US$60,000 compared to when you fell asleep. Now that’s what I call a Nightmare!
And make no mistake; the US is actively forcing a weak-dollar. A weak dollar means the US government will have much less to repay on its crippling foreign deficit that today stands at about 17 trillion. A weak dollar also helps tackle the high unemployment rate, which remains a significant issue in terms of US economic stability, by increasing GDP with cheaper exports thus attempting to boost manufacturing jobs at home. And although the dollar has strengthened against the euro in the last few weeks, there is no indication that US policy will change in terms of promoting a weak dollar. And we have not even mentioned the near zero interest rates remaining unchanged until late 2014 and the possibility of QE3 yet. So, for those still insisting on holding US dollars for use in the future, we seem to be encountering a perfect storm! And while a weak dollar may be a good deal for America right now it’s clearly a raw deal for the individual American.
Investing in or converting your fiat currency into Physical Strategic & Precious Metals is a means of securing a safe harbor during times of financial crises. We are living in a time where “too big to fail” simply isn’t true, where market swings can pang a deadly knockout punch and when rounds of quantitative easing are becoming the band-aid of choice in tackling sovereign debt and with it rising inflation.
Thankfully, Strategic Metals do not exist in these shadowy realms. Strategic & Precious Metals are tangible fixed assets that are not correlated to normal financial market trends. They are the essential components used across a broad spectrum of industry and demand continues to outweigh supply.
During the last decade, Haines & Maassen partnered with the Swiss firm Schweizerische Metallhandels AG to provide a way for European buyers to claim their own stake in Rare and Strategic Metals. Instead of selling Metals in substantial amounts to industrial clientele, the partnership splits them into nominal quantities, allowing individuals to own them physically while securely storing them in the Zurich or Panamanian duty free zone.
A few years later, Schweizerische Metallhandels AG opened offices in the Americas under the name Swiss Metal Assets (SMA). Now investors all over the world have access to this market. The results, frankly, have been phenomenal. In 2011, the values of the Metals in SMA’s original “A” and “B” Rare and Strategic Metals baskets increased 21%. The “C” basket is up over 10% since its launch in October 2011.
So whether you are looking for a new option for your personal retirement plan or simply wish to limit the hemorrhaging from your paper assets including your US dollars, there has never been a better time to transfer fiat currency into Strategic or Precious Metals.
Editors Note: For additional information on this and similar topics, please see PremierOffshore.com