Where We’re at From a Gold Investing Point of View
Things look bleak for the US economy. This is a trend that has been speeding up in recent years. Since Nixon took America (and therefore the world) off the gold standard, we’ve had a financial crisis about once a decade or so. Now it looks like we’re having one every couple of years.
Fortunately, there has always been a way to protect yourself from economic bad weather. Gold always has been, and always will be, a shelter against inflation, recessions, and depressions. The worse things get for fiat currency, the stronger gold gets.
Through gold investing, you can safely ride out the bad financial decisions of your politicians. Let’s face it, no matter who we put in office, we’re going to have these economic downturns. But gold will always be there to help you stabilize your investment portfolio. And, with the way politicians are treating our economy, protecting yourself financially is more important than ever.
A Brief History of Gold
For decades, the United States government has done a bad job of managing its fiat economy.
In 1944, the Bretton Woods Agreement made the US dollar the currency of international trade. For its part, the United States would keep the dollar pegged to gold to maintain its stability. So, after World War II, America became the leader of the business world.
In 1971, Nixon annulled the Bretton Woods Agreement and took the US dollar off the gold standard. He had a war in Vietnam to fund, and several social programs to institute to keep his campaign promises.
Taking the US dollar off the gold standard didn’t mean that it lost its place as the currency of world trade though. By then, it had held that title for so long, that there weren’t any other competitors for the position.
However, since becoming a fiat currency, the US dollar has experienced wild swings in value. About once every ten years, America has faced a major financial crisis. In the 80s it was the savings and loan crisis. The 90s gave us the dot com bubble. And, in the late 2000s, we had a global economic crisis.
And those are just the biggest crises of each decade. There have been many smaller yet noteworthy ones over the years.
These dramatic shifts in America’s economy show that government interference in the money supply has ruined the value of the dollar. Now, in 2022, there is more than ten times the amount of currency in circulation as there was 40 years ago.
The True Value of Gold
As a currency, gold has stood the test of time. Over the centuries, many different things have been used as a medium of exchange. Beads and seashells have had that distinction at one point or another, and the Roman Empire famously paid its legionnaires in salt. Out of all of them, though, gold has the best characteristics of money.
Aristotle suggested that to serve as money, a substance needed to be durable yet dividable, portable, and have an intrinsic value. In this regard, gold knocks it out of the park. It has the durability of metal, but it is soft enough to be easily formed into small amounts (coins, for example).
While heavy, gold is still easily portable. It also has had intrinsic value in Aristotle’s time all the way up to today. Then, it was used to make everything from functional items to pieces of art. Now, it can be found in a wide variety of electronics.
As a commodity, gold is a hedge against inflation. Since there is only so much gold in the world, it can’t be manipulated the way printed money can be.
Nixon couldn’t spend to his heart’s content while America was on the gold standard, so he had to get rid of it. In that regard, gold was a barrier to bad government action. Or, at least, part of a barrier. If America had had a mechanism to prevent the executive action Nixon took, things might have gone better.
Fast forward to today. Gold still has the power to fend off poor economic decisions whether they happen at home or abroad. It can do that while sitting in the national treasury, but it can also do it for you if it’s in your possession.
Gold Investing Can Protect You from Hard Times
By owning gold, you can protect yourself from economic downturns and high inflation. Politicians are always motivated to take the easy way out. They want to appear to solve problems with short-term answers, despite long-term consequences.
The quick and dirty answer is to print more money and raise the debt ceiling. No matter who you put in office, the same things are going to happen to a greater or lesser extent.
That’s not to say you shouldn’t participate in the political process. But, as long as we live under a system of fiat currency, that currency will become devalued over time.
But gold won’t be. It is recognized as a valuable commodity around the world. And, while a government can make owning gold illegal, they can’t get rid of it.
It’s your responsibility to be a good steward of your finances. Nobody else’s. And we know that our economy is going to have good times and bad. But, as long as you own gold, you have a natural barrier between yourself and an economic downturn.
Where We Go From Here
The sitting politicians will tell you we aren’t in a recession. They will even go so far as to redefine the word to prove their point. That doesn’t change the fact that inflation is skyrocketing, job growth is treading water, and the stock market is all over the place. This kind of volatility is part and parcel of a fiat-based economy.
Gold is the answer, though. It has been recognized as a means of exchange for thousands of years. As the value of fiat currency goes down, the value of gold naturally goes up. So, gold investing is an obvious way to protect yourself from an economic downturn. Look into adding gold to your assets today.