Relai's CEO raises important concerns about the possibility that the U.S. Dollar loses its status as a world reserve currency.
This transcript is an excerpt from the "Bitcoin Magazine podcast" hosted by P. and Q. Julian Liniger joins them to discuss the fundamentals of Bitcoin, and why it is gaining widespread adoption in Europe even during bear markets.
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Julian Liniger: There are efforts to weaken the U.S. Dollar as a reserve currency, due to developments in Russia, China, and other countries. Are you concerned that the U.S. could lose its status as a dominant reserve currency? How important is Bitcoin in this scenario?
Q: Totally. You need to break down the responses into different groups. For simplicity sake, I'd say there are three groups, even though they're closer than 500. The first group I would say is the Bitcoiners. They see the writing on that wall and can see that the U.S. government's moves and those of foreign governments are all in direct line to making the U.S. dollars the global reserve currency.
There is a sentiment, and I believe it should be expressed. It doesn't have to be announced in writing. It doesn't have to be a formal announcement from OPEC, from the EU, or anywhere else stating, "Hey! The dollar's just not global reserve currency." For me, whatever global standard is to price oil in, will be, in an intermediate term, global reserve currency.
The secondary issue is the imminent collapse of Europe's bond market. This has been seen in more countries that are developing. We witness the Japanese yen falling. The collapse of the Japanese yen is now being seen by another group of people. These two are the Bitcoin community.
Then there's the vast majority of Americans who, according to me, don't really understand what it means for the global reserve currency to be our currency and the currency our government can print endlessly. The vast majority of those people can tell you all these things, but they prefer to just say it. "The U.S. Dollar has been there my entire life and it will continue," I believe. It's something I share with close friends who I'll be having these kinds of conversations with. Their response will be "Yeah but like the government will solve it." It's not going away, like the U.S. Dollar." I believe there will be a lot pain among that group of people. They will all be shocked by the unavoidable.
Next, I believe the last group is the decision makers. These are people in government that see some, but not all, of what the Bitcoiners consider the inevitable end of the dollar. They believe that if they do a few things right, everything will go back to normal. The U.S. dollar will continue to be the dominant currency.
It's the combination and both of these ideas that I truly believe fuels our policy makers in this country. I don't care if they are right or wrong. Since a while, I have said that Jerome Powell's 2021 speech stating "Inflation will not be permanent" is the best example. It's not a problem. It's not a problem." In April or May, Congress will hear you testify under oath that you made a mistake. We didn't know as much about the subject as we thought. We are here because we didn't know as much as we thought.
There is no reason to believe that he has learned so much from that point in time that his decisions will bring the ship back to its rightful course. But I believe I am in the minority.
Frequently Asked Questions
Should You Invest in Gold for Retirement?
This will depend on how much money and whether you were able to invest in gold at the time that you started saving. If you are unsure which option to choose, consider investing in both options.
Gold offers potential returns and is therefore a safe investment. It's a great investment for retirees.
Gold is more volatile than most other investments. As a result, its value changes over time.
However, it doesn't necessarily mean that you shouldn't invest your money in gold. This just means you need to account for fluctuations in your overall portfolio.
Another benefit to gold? It's a tangible asset. Gold can be stored more easily than stocks and bonds. It can also be transported.
You can always access your gold if it is stored in a secure place. Physical gold is not subject to storage fees.
Investing in gold can help protect against inflation. Gold prices are likely to rise with other commodities so it is a good way of protecting against rising costs.
Additionally, it will be a benefit to have some of your savings invested into something that won't lose value. When the stock market drops, gold usually rises instead.
Gold investment has another advantage: You can sell it anytime. Like stocks, you can sell your position anytime you need cash. You don’t even need to wait until retirement to liquidate your position.
If you do decide to invest in gold, make sure to diversify your holdings. Don't place all your eggs in the same basket.
Don't buy too many at once. Start small, buying only a few ounces. Then add more as needed.
It's not about getting rich fast. Instead, the goal here is to build enough wealth to not need to rely upon Social Security benefits.
And while gold might not be the best investment for everyone, it could be a great supplement to any retirement plan.
Is buying gold a good retirement plan?
Although it may not look appealing at first, buying gold for investment is worth considering when you consider the global average gold consumption per year.
Physical bullion bars are the most popular way to invest in gold. You can also invest in gold in other ways. The best thing to do is research all options thoroughly and then make an informed decision based on what you want from your investments.
If you don’t need a safe place for your wealth, then buying shares of mining companies or companies that extract it might be a better alternative. Owning gold stocks should work well if you need cash flow from your investment.
You can also put your money in exchange traded funds (ETFs). These funds allow you to be exposed to the price and value of gold by holding gold related securities. These ETFs usually include stocks of precious metals refiners or gold miners.
Is it a good idea to open a Precious Metal IRA
It is essential to be aware of the fact that precious metals do not have insurance coverage before opening an IRA. If you lose money in your investment, nothing can be done to recover it. This includes all investments that are lost to theft, fire, flood, or other causes.
You can protect yourself against such losses by purchasing physical gold and silver coins. These items are timeless and have a lifetime value. If you were to offer them for sale today, they would likely fetch you more than you paid when you bought them.
If you decide to open an IRA account, choose a reputable company that offers competitive rates and products. A third-party custodian is a good option. They will protect your assets while giving you easy access whenever you need them.
Remember that you will not see any returns unless you are retired if you open an Account. Remember the future.
What is a gold IRA account?
Gold Ira accounts are tax-free investment vehicles for people who want to invest in precious metals.
You can buy physical gold bullion coins at any time. To invest in gold, you don't need to wait for retirement.
An IRA allows you to keep your gold forever. You won't have to pay taxes on your gold investments when you die.
Your gold will be passed on to your heirs, without you having to pay capital gains taxes. Your gold is not part of your estate and you don't have to include it in the final estate report.
To open a Gold IRA, you'll need to first set up an Individual Retirement Account (IRA). Once you've done so, you'll be given an IRA custodian. This company acts in the role of a middleman between your IRS agent and you.
Your gold IRA Custodian will manage the paperwork and submit all necessary forms to IRS. This includes filing annual reports.
After you have established your gold IRA you will be able purchase gold bullion coin. The minimum deposit required for gold bullion coins purchase is $1,000 However, you'll receive a higher interest rate if you put in more.
When you withdraw your gold from your IRA, you'll pay taxes on it. If you're withdrawing the entire balance, you'll owe income taxes plus a 10 percent penalty.
You may not be required to pay taxes if you take out only a small amount. However, there are exceptions. There are some exceptions. For instance, if you take out 30% or more from your total IRA assets, federal income taxes will apply plus a 20 percent penalty.
You shouldn't take out more then 50% of your total IRA assets annually. A violation of this rule can lead to severe financial consequences.
What are the advantages of a gold IRA
You can save money on retirement by putting your money into an Individual Retirement Account. You can withdraw it at any time, but it is tax-deferred. You have complete control over how much you take out each year. And there are many different types of IRAs. Some are more suitable for students who wish to save money for college. Others are made for investors seeking higher returns. Roth IRAs, for example, allow people to contribute after they turn 59 1/2. They also pay taxes on any earnings when they retire. These earnings don't get taxed if they withdraw funds. So if you're planning to retire early, this type of account may make sense.
A gold IRA is similar to other IRAs because it allows you to invest money in various asset classes. Unlike a regular IRA that requires you to pay taxes on the gains you make while you wait to access them, a gold IRA does not have to do this. This makes gold IRA accounts excellent options for people who prefer to keep their money invested instead of spending it.
You can also enjoy automatic withdrawals, which is another benefit of owning your gold through an IRA. That means you won't have to think about making deposits every month. To ensure that you never miss a payment, you could set up direct debits.
Gold is one of today's most safest investments. Because it isn’t tied to any specific country, gold’s value tends to stay stable. Even in times of economic turmoil gold prices tend to remain stable. Gold is a good option for protecting your savings from inflation.
What is a Precious Metal IRA, and how can you get one?
A precious metal IRA allows for you to diversify your retirement savings in gold, silver, palladium and iridium. These rare metals are often called “precious” as they are very difficult to find and highly valuable. These are good investments for your cash and will help you protect yourself from economic instability and inflation.
Precious metals are often referred to as “bullion.” Bullion refers actually to the metal.
Bullion can be purchased through many channels including online retailers and large coin dealers as well as some grocery stores.
An IRA for precious metals allows you to directly invest in bullion instead of purchasing stock shares. This ensures that you will receive dividends each and every year.
Precious metal IRAs are not like regular IRAs. They don't need paperwork and don't have to be renewed annually. You pay only a small percentage of your gains tax. You can also access your funds whenever it suits you.
How much tax is gold subject to in an IRA
The fair market price of gold when it is sold determines the tax due on its sale. If you buy gold, there are no taxes. It's not considered income. If you sell it after the purchase, you will get a tax-deductible gain if you increase the price.
For loans, gold can be used to collateral. Lenders seek to get the best return when you borrow against your assets. This often means selling gold. This is not always possible. They may hold on to it. They might decide to sell it. You lose potential profits in either case.
So to avoid losing money, you should only lend against your gold if you plan to use it as collateral. If you don't plan to use it as collateral, it is better to let it be.
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so 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)
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
- (Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (smartasset.com)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- 7 U.S. Code SS7 – Designation Boards of Trade as Contract Markets
- 26 U.S. Code SS 408 – Individual retirement funds
- Saddam Hussein’s InvasionHelped Uncage a Bear In 1989 – WSJ
- Are you interested in keeping gold in your IRA at-home? It's not legal – WSJ
Investing gold vs. stocks
Investing in gold as an investment vehicle might seem like a very risky proposition these days. This is because many people believe that gold investment is no longer profitable. This belief comes from the fact most people see gold prices falling due to the global economy. They believe they would lose their money if they invested gold. In reality, however, there are still significant benefits that you can get when investing in gold. Below we'll look at some of them.
One of the oldest currencies known to man is gold. There are thousands of records that show gold was used over the years. It was used by many people around the globe as a currency store. It is still used as a payment method by South Africa and other countries.
You must first decide how much you are willing and able to pay per gram to decide whether or not gold should be your investment. You must determine how much gold bullion you can afford per gram before you consider buying it. If you don't know your current market rate, you could always contact a local jeweler and ask them what they think the price is.
It is important to remember that even though gold prices have dropped in recent times, the cost of making gold has risen. Although gold's price has fallen, its production costs have not.
It is important to keep in mind the amount you plan to purchase of gold when you're weighing whether or not it is worth your time. If you plan to buy enough gold to cover your wedding rings then it is probably a good idea to wait before buying any more. However, if you are planning on doing so for long-term investments, then it is worth considering. Selling your gold at a higher value than what you bought can help you make money.
We hope this article has given you an improved understanding of gold investment tools. Before making any investment decisions, we strongly advise that you thoroughly research all options. Only after doing so can you make an informed decision.
By: Bitcoin Magazine
Title: What Happens If The U.S. Dollar Loses Reserve Currency Status?
Sourced From: bitcoinmagazine.com/markets/what-happens-if-the-dollar-loses-reserve-currency-status
Published Date: Thu, 22 Sep 2022 07:00:00 GMT
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