Your News to Know – March 30, 2014
Each week we bring you the news that affects not just the precious metals market, but your savings. And this week’s headlines provides yet another reminder of the importance of getting precious metals into your portfolio. With experts predicting the dollar’s worst collapse in history, and Obama’s new budget set to hurt millions of 401(k) savers, now may be the time to start thinking seriously about protecting your money. Meanwhile, why did Iraq just make its largest purchase of gold in 3 years? Here’s this week’s roundup.
Financial expert predicts dollar will collapse 90% or more
Say goodbye to the monetary system as we know it, warns financial expert James Rickards. The next major collapse is coming and it will wipe away 90% of the dollar’s value, Rickards said this week as he discussed his new book, appropriately titled “The Death of Money.”
Rickards points out that the global monetary system has collapsed three times already in the past 100 years – but the next one is going to be “exponentially bigger” than the last. These statements aren’t meant to be provocative or fear-mongering, he says. He’s urging people to be prepared.
“When a collapse happens, it will happen quickly,” he said. “You won’t see it coming. There won’t be time to run out and buy gold, and it probably will not even be available at that stage. You need to prepare now.” (Source)
Obama’s budget will spell disaster for 401(k) savers
“President Obama’s proposed budget for 2015 would be a disaster for the millions of Americans who are underprepared for retirement,” says Certified Financial Planner Scott Hanson in an article for CNBC.com. Obama’s proposed budget is intended to reduce tax breaks for wealthier Americans who are contributing to 401(k)s, but the plan will also hurt millions of middle-class Americans who are already struggling to save for retirement, Hanson says.
The new budget will reduce tax incentives for employers to offer 401(k) plans to their employees. Small businesses – which encompass most of the U.S. workforce – will feel the pain the most. To stay afloat, many of these businesses will cease to offer 401(k) plans, forcing many hardworking Americans to rethink their retirement plans.
Says Hanson, “The president’s budget proposal, while attempting to restrict the wealthy from saving more for retirement, will actually create additional hardships for the working class.” (Source)
Iraq fears economic shocks, buys $1.56 billion in gold
Increasing gold reserves has become a crucial strategy for Iraq. The country’s central bankers just completed its largest purchase in three years: 36 metric tons, valued at roughly $1.56 billion. Why such a big buy suddenly? Does Iraq know something we don’t?
Analysts say the reasons are the same for Iraq as they are for many other countries right now. “Gold is quite attractive to central bankers,” says Mark O’Byrne, a director in Dublin at brokerage GoldCore Ltd. “[Iraq] sees it as an important asset diversification and a safe-haven element within foreign-exchange reserves.” Economic expert Basim Jamil agreed, saying Iraq needs gold to stabilize its currency. “Iraq needs to boost its reserves to move away from economic shocks,” he said. Perhaps we should all be taking the same advice? (Source 1 & Source 2)401k, Featured, iraq, jim rickards