Author: Marin Aleksov

The National Debt and Gold Prices: How Are They Related?

It’s September 2020, and the U.S. national debt is nearing a staggering $27 trillion. Earlier this year, around the time that the COVID-19 pandemic started to impact the United States, the national debt spiked by $1.54 trillion in just six weeks.

Around 12 percent of the total national debt is owned by the Federal Reserve, who, as discussed in last month’s blog post, has been purchasing treasury bonds at an elevated rate in order to keep interest rates lower and to diminish the economic impact of the COVID-19 pandemic on the American people.

As the national debt has continued to climb over the years, the market price of gold has also gradually increased. The correlation between the two is simple: as our federal government borrows more money and pushes the country into greater debt, the value of our currency decreases. As the U.S. dollar becomes more unstable, consumers look to protect their financial standings with assets like gold and other precious metals, as their inherent value tends to remain relatively steady over the long term.

Many experts believe that the direct nature of the relationship between these two economic players dates back to 1971, when President Richard Nixon called for the removal of the “gold standard” that linked the value of gold to the value of the U.S. dollar. Instead of basing the dollar’s worth on a tangible source of value, like precious metals, the new fiat system operated on trust in the currency and created a debt ceiling for the government to function beneath (a ceiling which has since been broken several times, as seen in the above graph). So, while the value of U.S. currency no longer consistently moves in tandem with the national debt, the movement of gold prices continues to generally follow the same upward trajectory as the country’s debt levels.

Our fiat system has already been seriously impacted by the economic fallout from the pandemic. When operating within an unstable economy, fiat currencies tend to face debasement and become more unstable themselves. As the United States’ financial standing has become more volatile in recent months, the U.S. Treasury and the Federal Reserve have continued to take actions in response to that volatility that, while temporarily stimulating the economy, have dramatically increased our national debt and further debased the value of the dollar. On the other hand, though, gold has been experiencing a historic rally throughout much of this year.While it is likely that the national debt will continue to climb rapidly to new heights, and while the fiscal devastation the pandemic has wrought is undeniably terrible for the American public, it is worth noting that consumers still have access to gold as a potential safe haven in order to help protect their assets as they seek to maintain their own financial well-being in the long run.

The Federal Reserve and “Gold Positive Signals”

Since 1913, the Federal Reserve has held control over the United States monetary system and has worked to maintain its stability by creating regulatory policy, supervising banks, and providing services to various financial institutions. When the country is faced with a financial crisis, though, the Fed also has the capacity to employ certain emergency measures in order to keep the economy afloat. Over the last several months, the Fed has had to put these measures into action as part of its response to the COVID-19 pandemic.

Read on to learn more about how the Federal Reserve addressed the economic ramifications of the pandemic, how gold has performed on the market in comparison to the sectors of the economy managed by the Fed during this time, and how various asset classes may fare in the coming months and years.

What is Quantitative Easing?

In short, quantitative easing is a monetary policy in which a central bank purchases government bonds, securities, and other financial assets—regardless of interest rates—in order to stimulate the economy and encourage spending, lending, and investing.

As the nation’s central banking system, the Federal Reserve has initiated quantitative easing in the past as a means of alleviating the impact of financial crises. Following the 2008 recession, the Fed spent trillions on bonds and mortgage-backed securities to inject money back into the economy and to keep the country moving forward.

In March of this year, as the COVID-19 pandemic began to hit the United States, countless businesses were forced to suddenly shut down, and millions of American workers were consequently furloughed or laid off. In response, the Federal Reserve brought back its quantitative easing program and quickly expanded its security-purchasing capacity to an unlimited amount in order to soften the economic blow.

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Federal Reserve Chart, The Balance

Why is This Good for Gold?

Historically speaking, times of economic uncertainty have generally proven to be times of strong market performance for gold and other precious metals. Many consider gold to be a financial safe haven due to its reliability as a store of value and the consistent, millennia-old recognition of its purchasing power around the world. So, as the stock market has grown increasingly volatile, the U.S. dollar has decreased in value, and the Federal Reserve has deployed its stimulus efforts amid the COVID-19 pandemic, many consumers have flocked toward gold as a potentially more stable means of safeguarding their wealth.

Gold Price Historical Chart

Gold Price Historical Chart, Rosland Capital

 

In late July, gold hit a new record by surpassing $2,000 per ounce, and it has continued to maintain its market position around that price in the days since. In early 2000, gold wavered between $250 and $300 an ounce, meaning the price has increased by over 600% in the last 20 years.

What Happens Now?

While there’s no way to know our country’s financial future with certainty, some experts have speculated that the economic fallout from the pandemic could continue for years to come, even after effective treatment and/or a vaccine become available and “normal” life is able to resume in full. Despite the Federal Reserve’s mitigation efforts, the United States economy as a whole remains and may remain for some time in an extremely volatile state.

However, when it comes to gold, some analysts are predicting that the price rally is only going to continue—in fact, Bank of America recently raised its 18-month target to an unprecedented $3,000 an ounce. While the lack of clarity for what our economy’s future holds might feel a little disheartening, there is possible hope and stability to be found in the precious metal markets.

Rosland Capital’s Educational Resources

In my blog post last month, I discussed some of the many philanthropic initiatives Rosland Capital has taken on since I founded the company in 2008. In addition to being dedicated to performing charity work and helping those in need, Rosland has been committed to creating supplemental informational hubs alongside our main website to aid customers in making well-informed decisions for their asset portfolios.

Here are three of the most useful educational resources Rosland has developed over the years:

Buy Gold 101

Buy Gold 101 is an educational website created by Rosland with the intention of providing a comprehensive guide to the process behind buying gold and the potential value it can bring to your finances. For those looking to learn more about the gold market, how and why gold might be added to an asset portfolio, and the specific types of gold products Rosland offers, this site is a helpful introduction to the subject.

Rosland Capital IRA

Rosland Capital IRA is another educational site produced by Rosland as a means of informing readers about precious metal IRAs. The website provides an overview of various types of individual retirement accounts and discusses how precious metal products can be used to back certain IRAs. While it does not provide tax advice for those weighing their retirement account options, it offers an informative look at how incorporating precious metals into IRAs can potentially benefit those looking to protect their retirement savings.

Rosland Capital Guide to Gold

The Rosland Capital Guide to Gold is a book that I co-wrote with John Watson in 2015 as a resource for those looking to educate themselves on the value of gold. Among other topics, the guide goes over the history of the use of gold coins across civilizations, the process of coin-grading, favorable attributes in the coins you’re considering purchasing, the potential benefits of buying gold and adding a Gold IRA to your asset portfolio, and how Rosland can help you with all of your gold-based needs.

 

We at Rosland are proud to not only offer our wide selection of exclusive precious metal products, but also to serve as a strong source of information on the inner workings of the precious metals world so that our customers can feel confident in the choices they make for their asset portfolios. Check out any of these three resources to learn more!

The Philanthropic Initiatives of Rosland Capital

Since the founding of our company in 2008, we at Rosland Capital have been dedicated to making a difference. In particular, our philanthropic efforts have been directed toward charities and organizations that support the heroes of our community, like veterans and medical workers, as well as toward nonprofits affiliated with some of the businesses with whom we’ve built relationships, like Formula 1.

Here are a few of the charitable initiatives we have taken on over the years, starting with the most recent:

COVID-19 Food Donations

Rosland’s latest charitable efforts were launched out of our company’s desire to express admiration and gratitude for the hard work of the medical personnel at Providence Saint John’s Health Center, near our Los Angeles office, in their response to the COVID-19 crisis. In April and May 2020, we partnered with local restaurants Milo & Olive and Milo SRO Pizza to deliver delicious meals to the hospital as a demonstration of our thanks for keeping members of our community safe and healthy.

UCLA

In the fall semester of 2015 and the spring semester of 2016, Rosland Capital worked with the University of California, Los Angeles (UCLA) and the school’s Veteran Resource Office (VRO) to establish a fund that provided veteran university students greater access to educational and financial resources.

In 2017, Rosland Capital also sponsored the 18th annual Bruin Run/Walk, a 5k that raised money for and awareness of UCLA’s Chase Child Life Program through the Mattel Children’s Hospital. Rosland employees and I walked in support of the program’s efforts to help critically and chronically ill children and their families adjust to living healthcare-centered lives.

New Directions for Veterans

NDVets is a nonprofit that provides comprehensive services to countless veterans in Los Angeles County. With members of Rosland staff, I was proud to support this organization pro-bono and participate in its annual 5k Run/Walk on the grounds of the West Los Angeles Veterans’ Facility—based near our Los Angeles office—in 2014, 2015, and 2016. We were the top fundraising team each year, and I very much enjoyed the events.

American Red Cross

In 2014, Rosland Capital was able to donate over $12,000 to American Red Cross programs providing aid to former and current members of the armed forces by pledging $1 for every silver Peace Dollar coin sold in the month of October.

In 2015, I collaborated with John Watson to create the “Rosland Capital Guide to Gold”, a comprehensive book that shared information about some of the historical background of gold coins, the process of purchasing gold, and the potential value of adding gold into your asset portfolio. For each copy sold, we donated $10 to the Red Cross in support of its veteran services.

Fisher House Foundation

In 2015, Rosland Capital was honored by the Fisher House Foundation—an organization that builds accommodations for visiting military and veteran families to live in at no cost while their loved one is hospitalized—for developing an innovative program for them that raised a total of $50,000. Rosland worked with the Royal Canadian Mint to create a unique five dollar Canadian silver Maple Leaf coin with a heart-shaped mint mark. For each coin sold, Rosland donated to Fisher House as well as to Valour Place, a Canadian organization with a similar mission.

Formula 1

We have taken part in a number of philanthropic endeavors that are connected to our friends at Formula 1, including:

Ayrton Senna Foundation

In 2017, as an extension of our relationship with Formula 1, we created a series of coins honoring the achievements of one of the all-time greats of motor racing: the late Ayrton Senna. Sales of the coins generated significant income for the Ayrton Senna Foundation’s work in Brazil with disadvantaged children.

Race Against Dementia

For a 2019 auction hosted by Race Against Dementia—an organization founded by Formula 1 racing legend Sir Jackie Stewart to raise funds for dementia research and treatment—Rosland Capital donated a 1kg gold coin depicting a classic portrait of Sir Jackie, the proceeds of which were all allocated toward the charity.

Michael Schumacher Foundation

Michael Schumacher, the only driver ever to win the FIA World Championship 7 times, is celebrated in a range of gold and silver coins we’ve created in collaboration with Formula 1. Sales of these coins benefit Mr. Schumacher’s Keep Fighting Foundation and its charitable activities.

Upcoming Initiatives

This year, we are continuing our commitment to doing philanthropic work. We’re looking forward to sharing updates with you as more projects come to fruition—stay tuned!

Rosland Capital: May Food Delivery to Medical Workers

Throughout the month of April, Rosland Capital worked with local restaurants Milo & Olive and Milo SRO to demonstrate our gratitude toward the hardworking medical staff at Providence Saint John’s Health Center by providing them with delicious meals each week.

I’m pleased to report that our food delivery efforts have continued into May! We are endlessly appreciative of all that these brave medical workers do to keep our community healthy and safe.

Rosland Capital: Latest Updates and Exciting News

Rosland Capital has had a busy and productive couple of months! As always, we have been hard at work ensuring that our customers continue to have their needs met and precious metals questions answered. In addition to our everyday business practices, we have also been preparing behind the scenes for new product releases, strengthening our ongoing relationships with other businesses, and pursuing new activities with some truly wonderful organizations. Here are a few of the biggest and most recent updates from our company:

Lewis Chessmen Coin

In my March blog post, I discussed Rosland Capital’s relationship with the British Museum and the inspiration behind our latest collaborative project with them. I am happy to report that our Lewis Chessmen-inspired coin has now been released! The front of this 2.5oz silver coin depicts a king piece from the famed walrus ivory chess set, and the obverse bears a portrait of Her Majesty Queen Elizabeth II.

lewis-coin

Michael Schumacher Coins

In recent years, Rosland Capital has produced a number of exclusive specialty coins in collaboration with our friends at Formula 1. One of our latest releases with them was made in celebration of the achievements of Michael Schumacher, seven-time racing World Champion and an inspiration to millions. The 91oz gold and silver coins feature an iconic portrait of Schumacher, his signature, and the F1 logo.

F170 Coin

The most recent coin added to our Formula 1 collection celebrates 70 years since the first British Grand Prix was held at the Silverstone Circuit on May 13, 1950. The 1/4 oz gold coin features the specially-created F1 70 logo on the coin’s reverse, as well as the name “British Grand Prix” in F1’s own distinctive font.

f170-coin

Swedish-American Chamber of Commerce Partnership

Rosland Capital is now a Core Partner of The Swedish-American Chamber of Commerce in San Francisco & Silicon Valley, an organization that strives to unlock the full potential of Swedish-American and US-European bilateral trade relations. I am delighted to be serving as the representative for Rosland on the SACC-SF/SV Board of Directors, and I look forward to seeing what this new relationship will bring forth in the future.

Rosland Capital Supports Medical Workers in a Time of Need

At Rosland Capital, we’re keenly aware of the difficulties faced by so many during the COVID-19 crisis, and we want to do what we can to support hard-pressed medical professionals, whose work is crucial to all. 

To show our solidarity, we’ve arranged for individually packaged hot pizza, cheese lasagne, salads, and cookies to be delivered weekly throughout April to medical workers at Providence Saint John’s Health Center, a facility near our office location. We’re also supporting food industry workers and local restaurants Milo + Olive and Milo SRO. All of this wonderful food is prepared by them, with our thanks and appreciation. 

Below are a few photos from last week’s food delivery:

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We know medical professionals—caregivers, nurses, doctors—are facing tremendous challenges, and we want to show we are all grateful to them. We can’t do what they do, but we can stand with them.

A Special COVID-19 Announcement

To all our customers and friends,

I would like to reassure you that Rosland Capital’s sales representatives and staff will be available to help you with your needs throughout this time of upheaval. We are working remotely, using cloud-based technology to connect with each other, and with you, our customers, friends, and Rosland family.

The combination of the current health crisis and the high volume of customer orders may possibly cause us to experience some delays in shipping. We will do everything we can to deliver in a timely manner, of course. Your sales representative will keep you informed at every stage – your satisfaction is of paramount importance to us.

If you have any questions about this, please contact your sales representative. Please leave a message if they’re not able to pick up immediately, so they know you’ve called. As an alternative, you can call 1-800-679-6482.

Please take care of yourselves; we are here if you need our help.

 

Yours,

Marin Aleksov

Rosland Capital and The British Museum: Past and Future Collaborations

Over the last several years, Rosland Capital has aligned itself with a number of esteemed businesses and organizations, like F1 and the PGA Tour, to create exclusive coin collections in celebration of their successes and the history associated with their brands. One of our most exciting relationships has been with the British Museum, a London-based institution dedicated to showcasing some of human history’s most interesting and culturally significant artifacts.

Our Previous Collection

In 2018, Rosland released a series of coins licensed by the British Museum that depicted various helmets from the Museum’s collection, including helmets from ancient Greece, Rome, and Anglo-Saxon England. Below are pictures and descriptions of each of the coins released:

The Greek Helmet

This coin depicts a bronze Corinthian helmet from ancient Greece that dates back to around 460 BC. On the edge of the helmet is an inscription written by an Argive warrior dedicating it to Zeus as spoil won in a battle against the Corinthians.

Greek-Helmet-Gold

Greek Helmet ¼ oz Gold Coin

Greek-Silver-Helmet

Greek Helmet 1.5 oz Silver Coin

Greek Helmet

Greek Helmet—Inspiration Behind the Above Coins

The Gladiator Helmet

This coin depicts a bronze Roman gladiator helmet that dates back to the 1st century. It is believed to have been found in the gladiator’s barracks in Pompeii, Italy, and in addition to a medallion of Hercules on the forehead of the helmet, its design features a grille of circular links and a broad brim to protect the face and sides of the head.

British Museum Gold Coin 2 Reverse 1.5oz

Gladiator’s Helmet ¼ oz Gold Coin

Roman-Gladiator-Helmet

Gladiator’s Helmet 1.5 oz Silver Coin

Roman gladiator helmet

Gladiator Helmet—Inspiration Behind the Above Coins

The Sutton Hoo Helmet

This coin depicts a 7th century helmet that was discovered at the archaeological site Sutton Hoo in Suffolk, England. It is believed to have belonged to an Anglo-Saxon ruler, and in its original condition, it featured a three-dimensional snake and a winged creature across the crest and face of the helmet.

British Museum Gold Coin 3 Reverse 1-4oz

Anglo-Saxon Sutton Hoo Helmet ¼ oz Gold Coin

Sutton Hoo Anglo-Saxon helmetThe Sutton Hoo helmet as it would have appreared

Sutton Hoo Helmet (today vs. what it would have looked like in the 7th century)—Inspiration Behind the Above Coins

Our Upcoming Releases

We have an exciting new coin that will soon be released as part of our continued collaboration with the British Museum. This new silver coin will depict one of the Lewis Chessmen, a walrus ivory game piece found as part of a mysterious hoard on the Isle of Lewis in Scotland sometime before 1831. It is believed that the Chessmen—of which there are 93 known existing pieces—may have belonged to a Norwegian trader and could date back to 1150-1200 AD.

Here is a sneak peek at the Lewis coin and its inspiration:

248200 MTB-BM Reverse Silver 2.5ozClose up on Chessmen

 

We at Rosland Capital are grateful for our ongoing relationship with the British Museum, and we’re looking forward to seeing what else lies in store for our shared collection in the future.