Buy Gold Into the Fiscal Cliff?

Gold begins to glitter. After breaking below $1,700, gold stages a strong comeback. And is there more pain in store for crude? A look at the trades, with CNBC’s Melissa Lee and the Money In Motion traders.

Review: What is the Fiscal Cliff?

The “fiscal cliff” is dominating the news right now. Federal Reserve chief Ben Bernanke coined the term to describe the potential recession-inducing scenario the U.S. is facing on Jan. 1, 2013, when the Budget Control Act of 2011 is scheduled to go into effect.

What is the fiscal cliff? It’s a more than $600 billion combination of tax increases and government spending cuts that kick in on Jan. 1, with some analysts predicting possible economic chaos as a result. The new law will end the temporary payroll tax cuts and result in a 2% tax hike for workers; rescind various tax breaks for businesses; slap more Americans with the alternative minimum tax; and allow the 2001-03 Bush tax cuts to expire. Meanwhile, tax increases stemming from President Obama’s health-care reforms will begin, as will the spending cuts agreed upon as part of the 2011 debt-ceiling deal, affecting programs from defense to Medicare. At the same time, the spending cuts agreed upon as part of the 2011 debt-ceiling deal will begin, affecting programs from defense to Medicare.

Despite all the endless speculation about what U.S. lawmakers will decide, they face some tough choices that really boil down to just three possibilities:

• They can drive the U.S. off the fiscal cliff, resulting in a severe blow to gross domestic product that will drive the economy back into a recession;
• They can cancel some or all of the scheduled tax increases and spending cuts, thereby increasing the federal deficit, potentially damaging the U.S. credit rating, and sending the U.S. closer to a debt crisis like that threatening the eurozone;
• Or (in the likeliest scenario) they can figure out a way to delay the fiscal cliff and kick the can down the road, as lawmakers so often do when facing difficult or unpopular choices. The problem is that the further down the road we go, the tougher the consequences are going to be when we ultimately decide to fix things.

Precious metals have always been a safe haven for investing in uncertain economic times. Precious metals are assets that will never lose their value. They are not subject to systematic risks as fiat/paper money and hedge/protect your hard earned wealth against inflation and other threats of devaluation. Cornerstone Asset Metals was established to help guide investors safely in and out of the precious metals market.

Learn more about how buying gold and silver today is a smart move for your investment portfolio.

» Contact Cornerstone Asset Metals today to learn more about buying gold as an investment.

» Read our article: Why Gold is Going Up Today?

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