(AIER)—Not so long ago, commentators across the political spectrum were warning us that China’s economy was set to surpass America’s. The United States needed, one Senator claimed, “a 21st -century pro-American industrial policy,” to ward off this existential threat.
Such rhetoric was reminiscent of the late-1980s, when a slew of books appeared to warn Americans that, unless the United States adopted Japanese-like industrial policy (government intervention that shifts resources toward a particular sector or industry), it was doomed to be economically dwarfed by a country which America had militarily crushed four decades earlier.
Yet in 1990, Japan’s economy began entering its “Lost Decade” of stagnation. While that owed much to seriously flawed monetary policy, it also resulted from extensive government interventions into the Japanese economy via industrial policy: a point conceded by no less than Japan’s finance ministry in 2002.
Similar patterns may be manifesting themselves in China today. The shine is definitely off China’s economy, and many of Beijing’s economic dilemmas have resulted from the Communist regime’s dirigiste policies.
The biggest time-bomb confronting Beijing is its self-inflicted demographic disaster. Thanks to the one-child policy pursued between 1980 and 2016, China now faces all the complications associated with an upside-down demographic pyramid, in which an increasingly elderly population is supported by a shrinking pool of younger people.
That means ever-accelerating spending on pensions, welfare, and healthcare which will steadily crowd out investment in things like research and development, infrastructure, and defense. No wonder Beijing is now urging families to have three children. The trouble is that once demographic patterns are set in place, they are hard to shift. Consequently, as the foreign policy scholar Ryan Hass notes, China is now “at risk of growing old before it grows rich.”
Dismal demographics isn’t the only challenge with which China must grapple. The country is reaping the whirlwind of conscious decisions on Beijing’s part over the past 15 years to embrace more state-centric economic policies.
Take, for instance, China’s much touted Belt-and-Road Initiative (BRI). Since 2013, Beijing has sought to systematically promote and invest in infrastructure projects around the world, particularly in countries China considers geopolitically significant.
From its beginning, however, BRI has been characterized by runaway costs: so much so that, as early as 2015, state-run Chinese banks started reducing their exposure to BRI while Chinese commercial banks began trying to avoid it altogether. There is also evidence that BRI has long been marred by corruption on the part of those Chinese officials responsible for directing it.
Such problems, however, are to be expected when the government plays a heavy-handed role in directing investment — a process which steadily accelerated in China after Xi Jinping came to power in 2012. This has produced widespread misallocations of capital across the economy as a result of state-controlled banks lending to inefficient and zombie state enterprises.
Chinese state officials have even acknowledged that Beijing wasted at least $6 trillion on unsuccessful investments between 2009 and 2014. That makes it unsurprising that the IMF’s 2021 Article IV Consultation report on China concluded that Chinese state-owned businesses were, on average, only eighty percent as productive as private companies. This, the IMF report stated, had played a significant part in China’s ongoing productivity decline since the late-2000s.
A related problem is China’s aggressive use of industrial policy, especially since the early-2010s, in the form of subsidies, direct state investments, and cheap loans. The goal has been to try to bolster growth in sectors like advanced manufacturing, technology, the service sector, infrastructure, and agriculture.
Naturally if you throw enough money at any given economic sector, you will get some results. But Scott Lincicome and Huan Zhu’s extensive analysis of industrial policy in China shows massive failures in areas like semiconductors, 3G mobile technologies, domestic aircraft, and automotive manufacturing. The same policies have also contributed to growing corruption in many economic sectors, including China’s highly subsidized R&D sector.
These and other trends are making foreign investors nervous. This brings us to yet another problem facing China’s economic policymakers.
Inbound foreign direct investment in China has been falling now for two straight years. It is now at its lowest level since 1993. This development reflects a complex relationship, from trade tensions to unease about Beijing’s intentions vis-à-vis Taiwan.
Decreasing confidence among foreign business leaders about China’s future economic prospects also underlies this foreign investment downturn. The European Union Chamber of Commerce in China’s 2023 Business Confidence Survey, for instance, reported “a significant deterioration of business sentiment.” More specifically, “64 percent of respondents reported that doing business in China became more difficult in the past year, the highest on record;” “11 percent of respondents have shifted existing investments out of China;” “8 percent have taken the decision to move future investments previously planned for China elsewhere;” and “one in ten report they have already shifted, or plan to shift, their Asia headquarters (HQ) or business unit HQ out of Mainland China.”
“Uncertainties in China’s policy environment,” according to the Survey, were central to this deteriorating confidence. Foreign businesses are anxious about growing ambiguity concerning what Beijing will allow foreign businesses to do in China. This uncertainty has surely been exacerbated by the fact that China’s National Bureau of Statistics is becoming progressively more selective about what economic data it releases, and regularly delays the release of other relevant data. In August 2023, China simply stopped releasing information about its youth unemployment rate.
Do these trends indicate that China is about to lapse into Japanese-style 1990s stagnation? It is far too early to tell. They do, however, indicate that American policymakers — whether their focus is national security or trade — should recalibrate their approach to Beijing and avoid getting locked into a narrative which assumes that China is an unstoppable economic colossus. Put simply, the evidence suggests that it is not.
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Why Bullion Beats Numismatics and Collectible for Your Safe or IRA
Precious metals continue to attract Americans seeking reliable ways to protect their wealth amid inflation, geopolitical risks, and stock market swings. Whether stored in a home safe or held inside a self-directed IRA, physical gold and silver deliver tangible value that paper or digital assets often lack. Yet investors must choose carefully between bullion—pure bars and coins valued mainly for their metal content—and numismatics or collectibles, where rarity, history, and collector demand heavily influence pricing.
Advisor Bullion serves as a dependable source for straightforward, high-quality bullion. The company specializes in physical gold, silver, platinum, and palladium, emphasizing transparent pricing and products that deliver maximum metal content for every dollar spent. This approach makes it ideal for both personal holdings and retirement accounts.
Bullion consists of refined precious metals in standard forms like one-ounce coins (American Gold Eagles, Silver Eagles, Canadian Maple Leafs) or bars. Their value tracks closely to the current spot price of the metal. A typical gold bullion coin trades near the live gold spot price plus a small premium. This structure keeps costs clear and predictable.
Numismatic coins and collectibles add substantial value from factors such as age, rarity, minting errors, or historical significance. A pre-1933 U.S. gold coin or graded proof piece can carry premiums of 30%, 50%, or even 200% above melt value. While this appeals to hobbyists, it creates complexity. Pricing depends on subjective grading, collector trends, and auction results instead of daily spot prices.
For investors focused on wealth preservation and retirement security rather than building a collection, bullion often delivers better results.
Lower Costs and Better Liquidity for Home Storage
When keeping metals in a home safe or private vault, liquidity and efficiency count. Bullion offers clear benefits:
- You acquire more actual gold or silver per dollar invested. Numismatics divert a large share of your money into rarity premiums and massive sales commission, reducing your metal exposure.
- Selling bullion involves tight bid-ask spreads, so you recover nearly full spot value with minimal fees. Collectibles require finding the right buyer and may sell at a discount if demand for that specific item weakens.
- Bullion prices remain transparent and update with global spot markets. You can track gold near current levels or silver accordingly and know exactly where your holdings stand. Numismatic values are priced by the Gold IRA companies with hefty margins applied.
- Standardized coins and bars store efficiently and divide easily for partial sales. Rare coins often need protective slabs and controlled conditions, adding hassle and expense.
- Bullion enjoys worldwide acceptance. A 1-oz Gold Maple Leaf or Silver Eagle sells quickly to dealers anywhere. Niche numismatic pieces may appeal only to limited buyers, slowing liquidation when speed matters.
In times when quick access to value becomes important, bullion’s simplicity stands out.
Stronger Fit for Precious Metals IRAs
Precious metals IRAs continue gaining traction as investors diversify retirement portfolios beyond stocks and bonds. IRS rules permit certain bullion products in self-directed IRAs if they meet purity standards (.995 fine for gold, .999 for silver) and are held by an approved custodian. Eligible items include American Gold and Silver Eagles plus many generic bars and rounds from recognized mints.
Numismatic and most collectible coins generally face heavy scrutiny from custodians due to valuation disputes and elevated markups. These higher premiums mean less actual metal ends up working inside the account.
Bullion avoids these issues. Its value links directly to verifiable spot prices, which simplifies reporting and lowers the risk of regulatory challenges. More of your IRA contribution purchases real metal instead of dealer profits or speculative upside. Over time, owning additional ounces that appreciate with the metal itself can create meaningful outperformance compared with high-premium alternatives that deliver fewer ounces.
Regulatory guidance from the CFTC and state securities offices repeatedly cautions against aggressive sales of expensive numismatics or “semi-numismatic” coins for IRAs. For retirement planning, transparent bullion from established providers reduces risk and aligns better with long-term goals.
How to Get Started with Bullion
Begin by clarifying your goals. Are you protecting savings in a safe, or moving part of a retirement account into a precious metals IRA? Focus on the number of ounces you can acquire at current prices rather than chasing marked-up collectibles.
Diversify sensibly: use gold for core preservation and silver for its blend of industrial and monetary qualities. Mix coins for easier divisibility with bars for lower per-ounce costs on larger buys. Arrange secure storage—whether at home with proper insurance or through professional facilities.
As economic uncertainties linger and faith in conventional assets erodes, bullion continues proving its worth as a dependable store of value. Its direct approach avoids the hype that sometimes surrounds collectible markets and keeps the focus on the metal itself.
For investors prepared to strengthen their portfolios, Advisor Bullion supplies the expertise and selection needed to acquire high-quality bullion efficiently. Whether building personal holdings or integrating metals into an IRA, their emphasis on transparent, investment-grade products helps secure more ounces today that support greater financial security tomorrow. In a complicated financial landscape, bullion’s clarity and reliability make it the smarter foundation for protecting what matters most.