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Gold & Silver Have Thrived Amid Economic Chaos


The popularity of physical gold and silver as savings assets is in large part due to their diversifying characteristics during economic turmoil. There have been times when precious metals prices have risen sharply after big socioeconomic or political changes in the world.

What follows is an overview of two notable periods in American history that illustrate precious metals’ power to triumph during economic misery: the tumultuous decade of the 1970s and the years of the 2008 Great Recession.

The striking performances posted by precious metals during these two of the nation’s most profound economic downturns deserve the attention of savers who are evaluating how best to diversify their IRAs, 401(k)s and other retirement accounts to hedge against future periods of economic stress.

THE 1970S: DECADE OF THE "GREAT INFLATION"


Those who remember the 1970s will recall the decade as being one of significant economic distress in the United States. The unemployment rate climbed to nearly 10%, and by January 1980 inflation had reached a startling 14%.

Blame for this economic trouble fell to President Nixon, who took a number of controversial steps on “behalf” of the economy. Nixon was accused of forcing Federal Reserve Chairman Arthur Burns to keep interest rates artificially low in the run-up to the 1972 reelection campaign.

Experts suggest the high levels of inflation later in the decade were a direct result of this manipulation of the money supply. Wharton Professor Jeremy Siegel has referred to the decade as “the greatest failure of American macroeconomic policy in the postwar period.”

Although mainstream financial markets remained under pressure throughout much of the 1970s, gold and silver were a different story. Taking their cues from the troubled economy, gold climbed roughly 1,500% and silver shot up an astonishing 2,100%.

THE GREAT GLOBAL RECESSION – 2007 TO 2012


Memories of the 2008 financial crisis remain fresh for so many Americans. The “official” dates of the Great Recession in the U.S. run from December 2007 to June 2009. However, the consequences of the meltdown were in play for years afterward due to the global and prolonged nature of the contraction. A large number of American households were still struggling long after the “official” end date of the U.S. recession.

During this sharp economic downturn, precious metals prices rose very high, just as they did in the 1970s: gold climbed nearly 200%, and silver jumped almost 450%.

AUGUSTA PRECIOUS METALS CAN HELP YOU ADD THE DIVERSIFYING FEATURES OF GOLD AND SILVER TO YOUR SAVINGS


The performance of gold and silver during the 1970s and the 2008 financial crisis demonstrates that the right allocation to physical gold and silver during periods of significant economic distress has the potential to soften losses during volatile times. This doesn’t guarantee any future performance of gold and silver in your savings mix, of course. But it indicates a potential for offsetting some losses.

The Augusta Precious Metals education team is well-versed in gold and silver and their behavior during economic chaos. If you’re interested in learning more about incorporating gold and silver in your savings to help you diversify, call Augusta at 800-700-1008.

Augusta cannot guarantee, and makes no representation, that any metals purchased by a customer will appreciate at all or appreciate sufficiently to make a profit, and there is no certainty that any metals can be sold for a profit. The future value of the coins you purchase cannot be predicted. You could lose money. Don't purchase Augusta products with money you can't afford to lose. Prices may rise and fall over time or rapidly. Past performance of any coin does not guarantee future results. Premium coins are sold for more than the spot price of the precious metal they contain. Augusta's sale prices and buy-back prices are determined and controlled by Augusta. The value assigned to the coins you purchase at any given time may vary from retailer to retailer and Augusta cannot guarantee another retailer will value the coins at the same rate as Augusta would in any given circumstance. Augusta cannot guarantee buy-back of any item it sells and cannot guarantee another retailer will purchase coins purchased through Augusta. Augusta cannot guarantee another retailer will value a premium coin at the same rate as Augusta would in any given circumstance. This purchase is speculative and unregulated.

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