As many investors have discovered, inflation is public enemy number one for retirees. Since the establishment of the Federal Reserve in 1913, the dollar has lost 97% of its value. This erosion of the dollar’s worth has only accelerated since President Nixon ended the direct convertibility of the greenback to gold in August 1971.
One need only look to the federal government’s own CPI inflation calculator to see how
the mighty dollar has fallen over the years – according to this measure, $1 in 1913 has the equivalent of $23.62 today.
While annual inflation has averaged “only” 3.2% since 1913, this amounts to a cumulative inflationary rate of 3,200% in a hundred years – evidence of inflation’s corrosive power of compounded interest. Inflation affects all “paper” investment instruments, including equities and bonds.
A stock’s dividend of 3 or 4 % – anemic on its face – looks even worse when one considers the average annual inflation has been 4.2% since 1971.
Inflation and the stock market implosion of 2008 (when investors lost $7 trillion, according to the ‘Washington Post‘) are good reasons for investors to seek the safety of gold & silver.
The intrinsic value of gold & silver, historically used as legal tender, today makes it a natural choice for long-term investments.
An IRA LLC allows the investor to add diversification and security to his retirement account by taking possession of precious metals.