Up until 1971, when President Nixon took us off the Gold Standard, the Dollar had a value based on the value of gold as indicated on the denomination of the paper bill. The point being that you could only print Dollars up to the value of Gold you owned. Just as you and I can only write a check in the amount of money we have in our checking account.
Imagine what it would be like if we could write checks in any amount we wanted to, regardless of how much money we had in our checking account. That's exactly how the Federal Reserve Bank functions. There is no backing for the money they print other than that our Government declares what it's worth. No wonder Federal spending is at an all time high!
Just as a point of clarification, the Federal Reserve Bank is, NOT part of the Federal Government, does NOT have any reserve to back up the currency it prints, and is NOT a bank. It does NOT answer to any Government Agency, nor is there any external supervising agency acting as a watch dog to limit its activity.
'If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered.' - Thomas Jefferson.
As Mike Maloney has stated, Fiat Currency always fails around the 40 year mark. It is now 42 years since we changed from our dollars being 'money' to being 'currency.' Money is traded and accepted because it is based on an intrinsic value based on a known value, IE. Gold. Currency has no other value than that which we artificially place on it.
The real estate decline and the bank bail out are indicators that the life expectancy of our present currency is in jeopardy. I don't mean that this is the end of the world, just the end of our dollars as we know it. Real goods, buildings, farms, tangible items will still have value. How we pay for it will change. History has demonstrated that when ever a 'currency' system declines it is replace with a system based upon solid assets such as gold, silver or other hard assets.
It is common knowledge that our savings accounts in the bank are losing money daily. Between the ridiculously low interest rate and the declining value of the dollar it is perhaps the worst place to invest. People like Donald Trump, Robert Kiyosaki, Mike Maloney and Warren Buffet all are advising investing in hard assets.
Why buy Gold?
Gold is money and money is a currency. Thus gold is a form of currency, its acceptance in 194 countries, is of this world.
Many people know the importance and hedging of treasury assets in gold in recent decades has been lost. Without gold, there would be no money, because when they started to trade in gold, it was deposited in banks and evidence was obtained as a receipt for the amount of the stock. These were the first unofficial banknotes of the world. The trading of bank notes was thus born, and quickly recognized banks, such that gold deposited banknotes were playing an increasingly important role in society, and soon led the first official notes have been deposited with the gold one.
Today, the world has no more money, whose value is backed by gold. Thus, paper money is only one currency that has no real value.
The gold standard corresponded to the beginning of the 20th Century 1.504632 gram of gold = $ 1. Due to the compounding effect has been the gold standard in the coming years, after the introduction, is constantly changing and in 1971 abolished entirely.
Top reasons to buy gold, are:
1. Gold offers protection against inflation and currency reform
2. Gold bars are global cash
3. Gold is in crisis times, a stable investment
4. Gold is and will remain unimpaired, as the limited resources and are not reproducible
5. Global demand for gold is higher than supply
6. The purchase and sale of investment gold is exempt from VAT
Thus, gold is the security for you and your family and should exist in every household as capital protection.
This does not mean buying gold certificates or gold funds or gold stocks, it means buying hard, real gold that you can hold in your hand! [gold, silver, copper etc.] It also doesn't mean leaving your hard assets on a bank vault or other depository. Why? Because you are trusting them to be open for business when you need to retrieve your deposit.
Now lets look at the various types of hard assets [gold, silver, copper etc.] that are available and the benefits of each.
Nice to buy gold jewelry to look at and wear, but difficult to place a true value on. The condition of the item, setting and so forth can cloud the value when you want to sell it.
One ounce of pure gold, unlike unique items of jewelry, is exactly the same as any other ounce, enabling worldwide trade and liquidity of gold. Also, you are not able to use jewelry like cash, it must be sold and turned into currency. The same currency we bought gold to protect ourselves from.
Much easier to buy coins at a known value and sold or used as currency. However, condition is still a factor. The true content and purity of the coin ads to the speculation as to its worth. It's not easily used as currency due to the fact that the face value doesn't reflect its intrinsic value, thereby making it difficult to use to purchase goods and services.
In the U.S.A., as in many countries, private citizens can not own gold bars, and if you do happen to have some, they can be confiscated by the government. They are also extremely expensive, in today's market, to buy a 1 kilo bar costs around $27,091.00.
Bullion comes in grain, gram, and ounce weights, is very portable, and can be used as currency worldwide as long as it is 999.9% pure. That last '.9' is the key to look for, the difference in '.0' rather than '.9' is crucial. This is the best way for the average investor to buy gold. The bullion comes with it's weight and purity stamped directly on the bar. There is no question as to the quantity or purity of the gold. Cost to buy gold bullion is reasonable, ranging from $85.00 per gram to $1,800.00 per ounce at recent market valuation.
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