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Backdraft from Financial Crisis Calls for Protecting Your Assets

Backdraft from Financial Crisis Calls for Protecting Your Assets


Thursday, 18 August 2016 11:06 AM Current | Bio | Archive

The 2008 economic crash was a bit like a massive fire destroying everything in its path. Our economy was engulfed in flames, and everything, from jobs to property values to retirement funds, was reduced to a pile of ashes.

Now, however, the fire appears to have burned out. Employment rates and property values are rising. Markets are higher than they’ve ever been. So does that mean our economy is stable now? Has the fire ended, allowing us to sift through the rubble and rebuild our lives?

Not quite. Because there are several windows poised to break at any moment, which can start the whole fire over again by causing a massive backdraft.

Unstable Economic Factors

As a building burns down, the fire gradually depletes all the oxygen, and the fire begins to go out. However, if a window breaks, the sudden surge of additional oxygen can cause an explosion and start the fire blazing anew, worse than ever. So what are these windows in our economy that are poised to break? Here are just a few of them…

Low Interest Rates

Interest rates are currently the lowest they’ve been in ages. This is good for borrowers, but terrible for investors. Lower interest rates make it difficult for banks to pay off their debts. They slow the growth of your savings. Some countries are even experimenting with negative interest rates; instead of receiving money, bank depositors have to pay money to keep their own money in the bank. The longer interest rates remain low, the less stable the economy becomes.


We’ve talked before about some of the ways in which Britain’s decision to leave the EU has had disastrous consequences not only for their economy and for Europe’s, but for ours as well. And things are only getting worse. The Bank of England has just announced $92 million in quantitative easing. This lowers the interest rate even further and serves to devalue the pound, causing inflation. Experts are also predicting approximately 250,000 jobs will be lost as a result of Brexit and its aftermath. As we’ve all learned through painful experience, economic disaster abroad inevitably ends up on our doorstep, and reflected in our portfolios.

Flat Wages

Inflation has always been a problem in our economy, and it’s gotten progressively worse over the last few decades. It’s a fact of life that, over time, prices will always continue to rise. The problem is that wages aren’t rising with them. When the economy went south in 2008, many companies could no longer afford to give their employees annual cost of living increases. And even after the economy began to recover, wages stayed largely the same. And as prices continue to rise while wages stay the same, debt levels increase as well, as it becomes more and more difficult for the average person to support themselves on what they make.

China and the SDR

On October 1st, the International Monetary Fund will officially add the yuan (China’s unit of currency) to its Special Drawing Rights. This is expected to have a number of repercussions for the dollar and for the world economy. China’s economy continues to be weak and unstable, and their plan seems to be to use their inclusion in the SDR to strengthen their own economy while weakening the U.S. dollar. The full extent of the effect this will have on the United States and the world can at this point only be guessed at, but it seems to spell disaster for all involved.

Our government and a number of financial experts have been working for a long time now to put out the fire caused by the 2008 financial collapse. In some ways things are finally starting to get better—and that’s just when we’re most vulnerable to surprise backdrafts that can destroy everything.

How do you fireproof your economic present—and future? Keep a close watch, and make sure your money is invested in something secure, like tangible or hard assets that have inherent value. Both real estate and precious metals offer this protection, but can have a high buy-in.

That’s why many of my clients use money they’ve already accumulated over years to do a gold IRA rollover. That way they get the protection of tangible assets right away, without having to spend a lot out of pocket. In a fire, you safeguard irreplaceable valuables by locking them in a fireproof safe. Hard assets provide similar protection for your wealth, keeping you from losing what you have and helping you survive the oncoming disaster.

Trevor Gerszt is America's Gold IRA Expert, CEO of Goldco Precious Metals, and holds a position on the Los Angeles board of the Better Business Bureau. To read more of his work, Go Here Now.



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The 2008 economic crash was a bit like a massive fire destroying everything in its path. Our economy was engulfed in flames, and everything, from jobs to property values to retirement funds, was reduced to a pile of ashes.
crisis, gold, investing, protection
Thursday, 18 August 2016 11:06 AM
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