A potential downturn in the U.S. dollar could spell a surge for Bitcoin and gold, an economic prediction by financial powerhouse Jefferies suggests. The firm, which operates across four continents, foresees an inability by the Federal Reserve and G7 central banks to adequately retract their unconventional monetary policies. This situation could effectively set the stage for a currency upheaval, favoring owners of both Bitcoin and gold bullion.
Jefferies Warns of Unstable U.S. Dollar Outlook
The looming specter of a U.S. dollar collapse could prove particularly advantageous for those with Bitcoin in their digital wallets, according to the global investment bank Jefferies. As a full-service investment banking and capital markets firm, with headquarters in the U.S. and operations sprawling over the Americas, Europe, the Middle East, and Asia Pacific, Jefferies' predictions carry weight in financial markets.
Bitcoin and Gold as Crucial Hedges
Chris Wood, Jefferies' Global Head of Equity Strategy, recently described Bitcoin and gold as highly critical financial hedges. In view of currency devaluation and shrinking inflationary returns, these digital and physical assets will secure investor value. Wood's reputation within the industry, solidified by his recognition as Best Strategist in 2020 by Asiamoney in the Asia region, adds credibility to this investment advice.
Federal Reserve's Balancing Act
Wood detailed how the Federal Reserve is currently engaged in an intricate financial balancing act. On one hand, the institution is decreasing its balance sheet, while simultaneously escalating interest rates as a response to soaring inflation. With rising national debt and fear of a potential U.S. recession, this strategy might require a drastic switch to a more dovish stance.
Warnings of a U.S. Dollar Downfall
Wood warns about the potential for a monetary policy misstep leading to the faltering of the U.S. dollar. He predicts that an unsuccessful transition from unorthodox monetary models could precipitate this financial situation. This misstep will rejig the economic field with gold bullion and Bitcoin owners standing to benefit considerable gains.
Diversifying Portfolios with Bitcoin and Gold
Savvy investors should view their Bitcoin and gold assets as long-term insurance plans rather than short-term trades, according to Wood. This approach applies even more to U.S. dollar-based long-term global investors, including pension funds. Recommending a 10% portfolio allocation to Bitcoin, Wood advises diversification of investments to safeguard against potential fiscal turbulence.
The Rise of Institutional Bitcoin Investment
Wood also notes the increasing acceptance of Bitcoin in institutional investments. With digital asset custodian arrangements now firmly in place, Bitcoin is likely to serve as a viable alternative store of value to gold, offering another layer of financial security.
Undoubtedly, Jefferies' forecast and the potential market ramifications are likely to fuel interesting discussion in investment circles, with investors and analysts pondering the potential fortunes of Bitcoin amidst a U.S. dollar shakeup.
Frequently Asked Questions
Which is stronger? 14k Gold or Sterling Silver?
While gold and silver are both strong metals but sterling silver is less expensive than silver because it contains 92% pure Silver rather than 24%.
Sterling silver is also called fine silver. It is made from a combination silver and other metals, such as zinc and copper.
Gold is generally considered to be very strong. It takes tremendous pressure to split it apart. If you were to drop an object on top of a piece of gold, it would shatter into thousands of pieces instead of breaking into two halves.
However, silver doesn't have the same strength as gold. If you dropped an item onto a sheet of silver, it would probably bend and fold without shattering.
It is commonly used in coins and jewelry. The price of silver can fluctuate according to supply and demande.
Which precious metals are best to invest in retirement?
It is important to know what you have already saved and where money you are saving for retirement. You can start by making a list of all your assets. You should list all savings accounts, stocks and bonds, mutual funds certificates of deposit (CDs), annuities, life insurance policies, annuities 401(k), real estate investments, and any other assets like precious metals. Then add up all of these items to determine how much you have available for investment.
If you are younger than 59 1/2, you might want to open a Roth IRA account. A traditional IRA allows you to deduct contributions from your taxable income, while a Roth IRA doesn't. However, you will not be able take tax deductions on future earnings.
If you decide you need more money, you will likely need to open another investment account. Start with a regular brokerage.
Can I physically possess gold in my IRA account?
Many ask themselves whether they can physically possess gold in an IRA account. It is a valid question, as there is no legal way to possess gold in an IRA account.
But if you carefully examine the law, there's nothing stopping you from owning gold in your IRA.
The problem is that most people aren't aware of how much money they could be saving by putting their precious gold in an IRA.
It's easy to throw away gold coins but not so easy to put them in an IRA. If you decide to keep your precious metal in your own home you will have to pay two taxes. You will pay taxes twice: once to the IRS and one for the state in which you live.
You can also lose your gold and have to pay twice the taxes. So why would anyone want to keep their gold in their home?
You might argue that you need the security of knowing that your gold is safe in your home. It is important to store your gold somewhere safer in order to prevent theft.
If you plan on visiting often, you shouldn't leave your precious gold at home. If you leave your precious gold unattended thieves will easily steal it.
An insured vault is a better choice for gold storage. This will ensure that your gold is protected against fire, flood, earthquake and robbery.
You won't be responsible for paying any property tax if you store your gold in a vault. Instead, you'll have to pay income tax on any gains you make from selling your gold.
An IRA is a way to avoid paying taxes on gold. With an IRA, you won't have to pay income tax even though you earn interest on your gold.
Capital gains tax is not required on gold. If you decide to cash it out, you will have full access to its value.
And since IRAs are federally regulated, you won't have any trouble getting your gold transferred to another bank if you move.
The bottom line is that you can own gold in your IRA. The only thing holding you back is your fear of having it stolen.
- The maximum yearly contribution to an individual's IRAs is currently $6,000 ($7,000 for those 50 years or older), or 100% of earned income, whichever is less. (monex.com)
- SEP-IRA”Simplified employee pension” For self-employed people like independent contractors, freelancers, and small-business ownersSame tax rules as traditional IRASEP IRA contributions in 2022 are limited to 25% of compensation or $66,000, whichever is less4. (sltrib.com)
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal so that you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
- Silver must be 99.9% pure • (forbes.com)
How to start buying silver with your IRA
How to get started buying silver with your IRA – Owning physical bullion directly is the best way for you to invest in silver and gold. Silver bars and silver coins are a popular way to invest because of their liquidity, diversification, convenience, and ease.
If you want to buy precious metals like gold and silver, several options are available. You can either buy them directly from their producers like mining companies or refiners. If you don't want the hassle of dealing with a producer directly, you can purchase them from a dealer that buys and trades bullion products.
This article will help you to start investing silver with your IRA.
- Investing in Gold & Silver Through Direct Ownership – The first option for purchasing precious metals is to go straight to the source. This is the best way to get bullion right from the source and have it delivered straight to your house. Some investors keep their bullion at home, while others store it in a secure storage unit. It is important to properly store precious metals when you want it to last. Many storage facilities offer insurance against fire, theft and damage. You could lose your investments due either to natural disasters, human error, or even insurance. This is why it is a good idea for precious metals to be stored in a safe deposit container at a bank/credit union.
- Buy Precious Metals Online: If you don't want to carry around heavy boxes full of precious metals, there are other options. Bullion dealers sell bullion online in many forms, including coins or bars. Coins are available in a variety of sizes, shapes, designs, and colors. Generally speaking, coins are easier to carry around and less expensive than bars. Bars come in a variety of sizes and weights. Some bars weigh hundreds of pounds, while others only weigh a few ounces. When choosing which bar to buy, it is important to consider what you will use it for. If you plan on giving it as gifts, you might choose something smaller. It might not be the best choice if you're looking to add it in your collection or display it proudly.
- Buying Precious Metal From Dealers – A third option is to buy bullion from a dealer. Most dealers specialize in one area of the market, whether gold or silver. Some dealers specialize in certain types of bullion, such as rounds or minted coins. Others may specialize in specific areas. Others specialize in bulk buying. No matter which dealer you choose to work with, you will likely find they offer affordable prices and easy payment options.
- Purchase Precious Metals via Retirement Accounts – Although this is technically not an investment, it can be used as a way to increase exposure to precious materials. To qualify for tax benefits under Section 219 of the IRS Code, you must invest in precious metals through a qualified retirement account. These include IRAs as well 403(b), 401(k), and 403 (b) plans. These accounts can offer better returns than other investment options because they are specifically designed to help you save money for retirement. These accounts also allow you to diversify across multiple metals. What is the drawback? You can't invest in retirement accounts. These accounts can only be opened by employees who are sponsored by their employers.
By: Kevin Helms
Title: Bitcoin and Gold: A Safe Haven Amidst Potential U.S. Dollar Fall
Sourced From: news.bitcoin.com/analyst-warns-of-us-dollar-collapse-predicts-bitcoin-owners-to-benefit/
Published Date: Tue, 10 Oct 2023 02:30:13 +0000