Recent market shocks were something that most of us could have expected. Unfortunately, most of investors were blinded by their greed leading to numerous loses. As it usually goes, there were positive and negative consequences to this. Negative effect can be seen through destruction of many families that were relying on those funds to educate their children, buy a new home, save for retirement etc. On the flip side, it made us more conservative and allowed us to see things from different perspective. Overnight, economy has become conservative, relying on tangible assets such as commodities.
We can see from Birch Gold Group review that companies didn’t only profit from commodities. They also started inventing new services. Although commodities are perceived as highly inflexible, they are very valuable, stabile and they give us certain security. Because of this, they can be used for long term planning and saving. Funniest thing is, given the current state of affairs, that commodities can provide us both stability and significant profit. Furthermore, it turns out that resources such as gold and platinum have experienced bigger growth in prices than any other financial instrument or market.
Even though prices may seem overblown, there is certain logic to it. Simply put, investors are no longer confident in currencies and other financial instruments. However, perception of financial market is not the only reason why prices of commodities are so pricey. Real life events also dictate such behavior. In last couple of years, giant countries such as Brazil, India, Russia and China started developing at a fast pace. Logically, high level of development requires raw resources for public works, infrastructure facilities and other projects. While western world was struggling, eastern countries decided to open their doors to investments and foreign capital. Suddenly, all these investors and companies that lost a lot of money saw their salvation on the East. Enormous amounts of money started flowing in before mentioned counties (as well as some Arabic and South East Asian countries). Through taxation, their budgets obtained enormous resources that couldn’t be spend on regular things. Instead, they started with all before mentioned projects.
Nowadays, people are much more willing to put their money into commodities than in traditional investment instruments. We have seen rise of derivatives market. Futures are especially popular, allowing people to bet on future price increase of a certain resource. But, that wasn’t the only change. Individuals started converting their money into gold and silver. It was much better to have gold lying around your home than dollar bills. Due to this, gold and silver offices replaced normal exchange offices. Same happened with retirement funds. Crisis forced governments in different part of the world to reduce pension, and in some cases, even eliminate it. As a result, people were left standing on the rain, without nickel in their pockets. This can of course happen because government of one country is supreme entity which can impose any law. Consequently, commodity retirement account companies were established, in order to give people another option and to allow them to diversify their retirement fund.
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