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Currencies and Stocks Plummet in Value Against an Ounce of Gold

By Patrick Heller 

The main reason why I advocate that people should own some bullion-priced physical gold and silver coins and ingots as part of their investment portfolio or net worth is to serve as a form of “wealth insurance” against declines in the value of paper assets such as stocks, bonds, and paper currencies.

The financial turbulence of the past few weeks shows perfectly why I make such a recommendation. In an analysis I did of the changes in paper asset values against an ounce of gold for the four weeks ended March 10, 2020, every single paper currency and stock index I track had declined against gold. Several stock indices fell more than 20 percent.

Here is the actual data:

   Asset              4 Weeks End March 10, 2020 change in value to 1 ounce of  gold


The above analysis only takes into account the change in asset values. It does not factor in any dividends that any of the stock in the various indices might have paid during the four-week period. However, even if dividend payments had been included, it would only have a tiny impact on the results.

Much has been made of trying to blame the spread of the coronavirus for causing the recent decline in paper asset values. Unfortunately, the underlying cause of overvalued currencies and stock had nothing to do with the disease. Instead, the coronavirus was only the spark that ignited the paper asset meltdown.

The decline in paper asset values has prompted renewed public interest in acquiring physical precious metals. The U.S. Mint, through March 10, had already sold 1,345,000 silver eagle dollars this month compared to only 650,000 coins for the entire month of February. Don’t be surprised if some bullion-priced gold and silver product availability delays develop soon.

Patrick A. Heller was honored as a 2019 FUN Numismatic Ambassador.  He is also the recipient of the American Numismatic Association 2018 Glenn Smedley Memorial Service Award, 2017 Exemplary Service Award 2012 Harry Forman National Dealer of the Year Award, and 2008 Presidential Award winner.  Over the years, he has also been honored by the Numismatic Literary Guild (including twice in 2019), Professional Numismatists Guild, Industry Council for Tangible Assets, and the Michigan State Numismatic Society.  He is the communications officer of Liberty Coin Service in Lansing, Michigan and writes Liberty’s Outlook, a monthly newsletter on rare coins and precious metals subjects.  Past newsletter issues can be viewed at http://www.libertycoinservice.com.  Some of his radio commentaries titled “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 AM Wednesday and Friday mornings on 1320-AM WILS in Lansing (which streams live and become part of the audio and text archives posted at http://www.1320wils.com).  

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