• 546 days Will The ECB Continue To Hike Rates?
  • 546 days Forbes: Aramco Remains Largest Company In The Middle East
  • 548 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 947 days Could Crypto Overtake Traditional Investment?
  • 952 days Americans Still Quitting Jobs At Record Pace
  • 954 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 957 days Is The Dollar Too Strong?
  • 958 days Big Tech Disappoints Investors on Earnings Calls
  • 958 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 960 days China Is Quietly Trying To Distance Itself From Russia
  • 960 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 964 days Crypto Investors Won Big In 2021
  • 965 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 965 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 968 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 968 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 971 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 972 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 972 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 974 days Are NFTs About To Take Over Gaming?
  1. Home
  2. Markets
  3. Other

Why Buy Gold?

  • Gold has been real money (medium of exchange and a store of value) for over 3,000 years. It is still real money.

  • Gold has no counter-party risk. It is not someone else's liability. It has intrinsic value that is recognized around the world.

  • ALL paper money systems have eventually failed. The intrinsic value of paper money is effectively zero; and all paper money has, throughout history, eventually devalued to zero.

  • Paper money is a liability of a central bank or a government that may be insolvent. The money issued by a central bank or government has value based NOT on its intrinsic value, but only upon people's faith, trust, and confidence in that money. Occasionally that faith and confidence is misplaced. For example:

100 Trillion Zimbabwe Dollars

  • The price of gold in US dollars since the year 2001 has been strongly correlated with the ever-increasing official national debt of the United States. Read $4,000 Gold! Yes, But When? Does anyone believe that the national debt will decrease or even remain constant over the next several years? NO! The national debt will increase even more rapidly over the next four years and so will the price of gold. Skeptical? Then look at the chart of national debt and the nearly parallel price of gold. Still skeptical? Do you remember gasoline selling for less than $.20 per gallon and gold selling for about $40? They have increased in price because there are currently many more dollars in circulation than in the 1960s - hence, it takes more dollars to buy an ounce of gold, a gallon of gasoline, a loaf of bread, a cup of coffee, or a fighter jet.

UnitedStates National Debt and Gold Price

  • Because governments and central banks issue paper money backed by nothing but faith and credit, they are in competition with gold which is real money. Should we be surprised when they discount the importance of gold and discourage ownership? Should we be surprised when the "Oracle of Omaha" denigrates gold ownership? (Berkshire Hathaway holds huge positions in banking stocks and Goldman Sachs stock.) Should we be surprised when news stories are heavily slanted against gold ownership?

  • Groucho Marx once said, "Who are you going to believe, me or your own eyes?" Who are you going to believe - the history of gold as valuable money while paper money failed, or the pronouncements of politicians, central banks, and the owners of bank stocks?

  • Who and what do you believe? It will be important to your financial well-being if (when) paper money accelerates its journey toward an intrinsic value of zero. Read Ten Steps to Safety.

  • Are you going to believe history and current facts or less reliable information from politicians, central banks, and the owners of bank stocks?

 

Back to homepage

Leave a comment

Leave a comment