The Best Thing
My Mom Bought in India By Jeff D. Opdyke, Editor, The Sovereign Individual Dear Sovereign Investor, My mom recently built herself a golden parachute.
Several years ago she uprooted her life in the U.S. and retired to a small town in southern India. She took a big slug of her retirement savings and wired it to a bank there, telling me she wanted the security of having her cash nearby. That made sense.
But then she told me she was putting all that cash into the Indian rupee.
That made zero sense.
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By now, you know I am not the biggest fan of the U.S. dollar; it's living on borrowed time. But neither am I a fan of putting the bulk of your net worth into a single, emerging-market currency like the rupee. Too many things can go wrong locally or globally that could crush the one currency you own (that's also the reason every American should reduce their overexposure to the dollar).
My mom hemmed and hawed, and gave me a dozen reasons why she wanted to put all her money into the rupee. So, I stepped aside and let her pursue her own path.
And that's when she surprised me. Gold is Her Insurance Policy When she returned home recently, I asked her what she'd ultimately done with her cash. She told me she had put it into gold instead of rupees.
I was stunned.
She bought gold like the Indians do - the big, heavy, distinctive 22-carat gold necklaces that look like hand-carved works of art. Her chains were, in fact, hand-made in small jewelry shops during her travels to Bangalore and Hyderabad. She told me she felt safer with her money in gold.
I think everyone should think like my mom.
Gold is an insurance policy. Just as homeowners, auto and life protects your house, your car and your family's ability to pay for life if you die prematurely, gold protects your purchasing power from the long-term erosion of the U.S. dollar.
Take a look at the chart below. I've used it many times in presentations and articles I've penned. It's the price of gold plotted over the last 30 years against the Federal Reserve's U.S. Dollar Index. It shows you clearly that the dollar and gold move in opposition ... meaning that as the dollar weakens against global currencies, the price of gold rises. 
And we know the dollar is on an unhealthy path thanks to bad fiscal management here at home.
I won't detail the sad litany of America's financial woes; we all know how rotten it is. The upshot is that the dollar is doomed to its downward slope so long as our national debts keep escalating - and I see no moves by Congress or the White House to honestly curtail profligate spending.
The dollar will continue to weaken, as it has for much of the past 30 years, and your spending power will diminish. Gold protects against that. As the price of gold rises, you can sell off a few bars here and there and use the cash to supplement your income, negating the impact of the declining buck. The Easiest Way to Own Gold Now, owning gold jewelry, such as mom does, is not as good as owning gold bars and collectible coins - it's not as easily traded or as universally accepted - nor is it as pure. Moreover, it leaves me concerned that my mom is wandering around southern India with nearly all her wealth draped around her neck...
(Still, at the end of the day she owns the world's only true money, and that makes me ecstatic.)
The better approach is to own investment-grade gold.
There are several options, including bars and coins - and I am fan of both. You will, however, need to find secure storage and that might mean the cost of a safe or a safe-deposit box. To me, the easiest option for owning gold and silver is through a so-called pooled account. Only a few places offer them, and the one I advocate is offered by EverBank.
With a minimum investment of just $5,000, you can own a portion of a pool of gold and silver with other investors. None of the metal is held directly in your name, but that keeps costs down because in a pooled account you pay no storage, delivery or annual fees. This makes pooled accounts a cost-effective way to own direct exposure to gold.
The best part is that if you ever wish to own the tangible gold and silver bars or coins, you can request that EverBank transfer all or some of your portion of the pooled account into an "allocated account" - and from there you can take delivery of the bars and coins directly.
It might not be as pretty as a 22-carat gold necklace, but it is the best way to own exposure to the best insurance policy I know to protect you against the ever-declining U.S. dollar. Until next time, stay Sovereign. 
Jeff D. Opdyke
P.S. Owning gold is a sure way to protect yourself from the crumbling US dollar, but there are technologies on the horizon that can actually let you profit from the greenback's demise. To show you how the dollar's loss can be your gain, check out my newest special report on the coming "Death of Cash." | |
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