Last Wednesday, the Federal Reserve of United States announced its plan to purchase US$600 billion Treasury securities. What this means it that the USA will be printing another $600 billion dollars and flood the international markets with cheap dollars, effectively driving down the value of dollar.
Now how would that affect you? Plenty. This is because now that banks have cheap access to huge amount of money and will drive down interest rates to virtually zero. So actually your money in the bank is getting negative interest rates due to inflation.
One way to hedge against inflation and earn passive income is investing in precious metals like gold and silver. Throughout history, gold has always been viewed as safe haven, particularly during turbulent times like wars. This is because unlike currency, gold has intrinsic value and is in limited supply. For the longest time, investors have always regarded gold as a safe haven during market uncertainty. Thus, gold prices usually move in opposite direction to the state of economy.
In Singapore, one of the easiest ways to invest in precious metals is by investing in UOB’s gold/silver saving accounts.Based on my knowledge, UOB is the only bank that offers this type of investment to retail customers. This is equivalent to depositing a certain amount of money in the account and you can choose to buy and sell unallocated gold/silver through the passbook.
Unallocated means you are not buying physical gold/silver and UOB will not store any gold/silver for you. Effectively, you are betting on the movement of gold/silver and converting your cash deposits into gold/silver in terms of value. UOB would charge a nominal administrative fees per month. Check out UOB website for more information.
With USA printing money like nobody’s business, investing in precious metals seem logical. UOB gold/silver account offers the easiest way for retail investors to take advantage of this wealth transfer and make passive income. If you think that over the long run, gold/silver will appreciate in value, investing in UOB gold/silver accounts can be a good form of passive income.
However, do exercise caution and invest within your means as investing in paper precious metals is never risk-free.
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