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In the past few days economic figures have reminded us of the rocky economic road ahead and the continued need for some wealth insurance. This has strengthened the case for gold as the best way of achieving this portfolio protection.
Firstly UK inflation rose sharply in December to 3.7%, way above expectations. This has mostly come from the huge increases in energy prices. This now puts UK inflation higher than that of hyperinflation prone Zimbabwe’s CPI at 3.2%, thus making a mockery of long standing commentary in the press that it was ridiculous to compare Britain’s inflation problems with that of Zimbabwe. This month saw the well publicised VAT increase begin which will further fuel UK inflation. Here at Physical Gold, we’ve long been concerned about the possibility of high inflation in the UK due to the dangerous combination of record low interest rates and Quantitative Easing.
After these inflation figures were releases the markets reacted by starting to
price in interest rate rises as early as the Spring. However, Ernst & Young has warned that any such increase would be premature and put the UK’s economic recovery at risk.
Next up was some unemployment figures. The total has now hit 2.5m after a 49,000 rise. Perhaps most alarmingly for the future is that youth unemployment (16-24 year olds) increased to the highest levels since records began.
Finally, somewhat slipping under most people’s radars due to the inflation and unemployment figures, was the news that UK national debt has now surpassed the £1 trillion mark. Just as scary is the pace at which this debt continues to rise – £7,000 every second!
So if you’re honest with yourself and take a hint from the above figures, you’ll come to the conclusion that we’re in this squeeze for a while to come. So with gold providing the balance your portfolio needs in these circumstances there’s no better time to invest in some physical tax free gold coins.
The fact that the gold price has done so well over the past few years means it’s predicatble in its nature. With inflation and unemployment struggling, this is the perfect case for gold to continue outperforming every other asset class.
Daniel Fisher formed physical Gold in 2008, after working in the financial industry for 20 years. He spent much of that time working within the new issue fixed income business at a top tier US bank. In this role, he traded a large book of fixed income securities, raised capital for some of the largest government, financial, and corporate institutions in the world and advised the leading global institutional investors. Daniel is CeFA registered and is a member of the Institute of Financial Planning.