Concerns Over A U.S. Default May Act As Another Major Catalyst For Gold

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The date the U.S. can no longer pay its bills is rapidly approaching. 

Treasury Secretary Janet Yellen stated that the “X-date,’ as it’s usually called, is June 1st, but a Goldman Sachs representative recently stated the true deadline may be a week later. Whatever the actual date, the U.S. government is quickly approaching a historic moment, and its legislators are being forced to take action. 

A U.S. default would trigger an unprecedented economic catastrophe. The White House says that “under a protracted default scenario, job losses amount to almost 8 million” and a “sharp recession on the order of the Great Recession.” A U.S. default could potentially erode investor confidence in the U.S. government as the leader of the world economy and could very likely trigger a devaluation in the U.S. dollar as a safe-haven asset. 

Currently, the Republican and Democratic parties remain locked in debate, with opposing views on how to deal with the rising debt ceiling. The views mirror those undertaken by the parties in a similar situation in 2011 when the U.S. reached its borrowing limit. As a solution to the rising U.S. debt, the Republican party is advocating significantly reducing spending and borrowing, while the Democratic party is arguing for a “clean” increase in the debt ceiling, without any attached conditions. 

With the “X-date” fast approaching, a lack of compromise between the two parties could trigger global economic devastation. 

The Asset Protector’s View: An Opportunity In Gold?

While the obvious best-case scenario is the avoidance of default, those seeking to protect their wealth will likely be preparing themselves for less ideal results. In the case of a U.S. default, a global economic recession, rapidly declining markets, a fall in the value of the U.S. dollar and large-scale unemployment are expected results. 

With the world’s default currency losing its credibility, investors will likely scramble to other assets to help protect their earnings. A likely destination for these individuals is gold, an asset that has historically served as a safe haven in times of crisis. In the turbulent 2011 period, gold experienced a significant rise, reaching all-time highs. In 2023, gold has already tested its all-time highs, and with further uncertainty brimming, it might even rise further. 

For those seeking to protect their wealth and safeguard against potential catastrophes, gold is one of the most popular destinations, but caution is needed when choosing the right partner to invest in gold with. One candidate that could be worth looking at for investors is Birch Gold Group, a national expert on gold and precious metals Individual Retirement Accounts (IRAs). 

Serving over 21,000 customers since 2003, the company has set a standard of excellence amongst the precious metal dealers in the country. It has maintained an A+ rating with the Better Business Bureau, an AAA rating from the Business Consumer Alliance and numerous 5-star ratings on top-review websites, including Consumer Affairs and GoldDealerReviews.com. Birch Gold Group is also heavily endorsed by industry leaders like Ben Shapiro and Stephen K. Bannon. 

Learn more about how Birch Gold Group can help protect Americans from a potential U.S. default by clicking here. For a free informational kit about precious metals, click here. 

Featured photo by Kenny Eliason on Unsplash.