The Benefits And Risks Of A Gold 401k Rollover


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There are few people who fully understand the purpose of investing in precious metals, and fewer still who have ever heard of the benefits and risks of a gold 401k rollover. The principle behind it is fairly simple, but it carries some great risk. The risk is something one might not recognize unless they know history.

In such an account, a professional in the field of finance can help guide their clients through the process of rolling their investment portfolio into a precious metal backed IRA. This money is then used to buy the metal. However, it gets sticky when clients realize that they will not be given their purchase to carry, but it will remain in the hands of the investment company.

This type of investment looks good on the surface, if the individual understands how such plans work. Investing in precious metals is not an investment that will necessarily make a person wealthy. However, these metals maintain their value even when the common currency collapses.

This makes a great deal of sense to anyone who is watching the chaos taking place within the European Union where the Euro, a fairly new currency on the market, has floundered. When a currency loses value, then everything the people need or want goes up in price. Those in the United States are beginning to feel the pinch, and many are becoming increasingly concerned over the potential of a hyperinflation currency crisis due to the bailout of the banking industry.

Germany saw exactly such a scenario in the 1930s, precipitating the establishment of the Nazi party which gave Hitler a rise to power. The people did not fully understand that their banks had flooded the country with cash, and this influx of new money caused the value of their money to decrease drastically. The United States was well-entrenched in what is known as the Great Depression, and Germany experienced their own Great Depression at that time.

The Great Depression in the US was initiated by the Federal Reserve after the passing of the Federal Reserve Act in 1913. By creating a panic on Wall Street, many investors who were experiencing a massive loss of stock value engaged in a run on the banks in order to withdraw all their funds. This panic was actually initiated by the newly instituted Federal Reserve as a means to close any banks not associated with them, giving them absolute power over the value of the United States currency.

The second World War helped get the United States out of their Depression, but it also put the people into a fanatical nationalist frenzy. It was at this time that the people were told they had to turn over all their holdings of precious metal to the government in order to support the war effort. Some people knew better, and had their holdings kept at home, but many had them in safe deposit boxes where they could be easily confiscated.

When you look at history in this light, it becomes clear why one is risking everything by allowing a corporation to hold their investment for them. It is hardly a means to secure wealth if it is available for government officials to take. Such an investment is an excellent way to avoid the fluctuating stock market, but only if one is savvy enough to keep their precious metals hidden away in their home.

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