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Invest In Gold During Periods of Inflation
Gold is the money people turn to in times of inflation and economic turmoil. Gold is a means of hedging against inflation. If you are thinking at this moment that gold is not money, but rather a yellow metallic decoration that people adorn themselves with, then you are incorrect.
Gold has been used as money for nearly 6,000 years. The first forms of good money that qualified as real money were gold and silver. Aristotle believed that stable money had the following characteristics.
1. The ability to be durable. It must stand the test of time and not wither.
2. The ability to be portable. Good money needs to hold value in a small space.
3. The ability to be divisible. Real money should have the ability to be divided evenly and still hold its value. Also known as fungibility. Diamnonds are not fungible because each diamond has it's own value.
4. It must hold a rare value or quality.
Aristotle was aware of something about money that most people today would struggle to comprehend. Paper money has no value, and that is what Aristotle described in his qualities of money.
Paper has no intrinsic value because it's paper. It can be produced on demand. There is no rarity or durability.. The only thing giving value to paper money is the trust that we put into it.
A dollar bill is nothing more than a piece of paper with ink stamped on it. That's it. It would be the same thing if someone gave you a sheet of writing paper to mow their lawn. There is no difference between the two. The two are paper.
If someone gave you oil, silver, copper, or gold to wash their car then it is different. Those are real assets. It indicates hard work and sweat to bring those assets about.
Since our government can produce as many dollars on demand as they want, the more they print the more worthless our money becomes. This means that a dollar collapse is happening under our noses. That is the sole reason gold and silver were the first and only currency used for thousands of years. Gold and silver can not be produced at will.
Mining companies must do lots of drilling and surveying before actually bringing a mine online. This takes precious time and resources. Using paper money as currency is a historically recent thing. There have been hundreds of fiat paper currencies in history and all of them have failed.
Gold and silver coins are the only way to protect yourself from rising inflation. While paper money falls in value, gold will continue to soar higher.
Not only is our dollar falling in value, but gold is in the middle of a 20 year bull market. The gold price is at an all time high of over $1,100/oz. People flock to gold in times of Inflation. Why do people do this? It's because gold can not be inflated. What does inflated even mean?
Pretend you are inflating a balloon. The balloon gets so big that it sometimes bursts. Our government is inflating our dollars in much the same way. Our government is putting massive amounts of money into circulation. When you have more and more dollars chasing the same level of goods, you have inflation.
Inflation means printing more money, it does not mean prices have risen. The result of printing more money is high prices. The best advice I have heard is to get out of dollar related assets before it is too late.
Gold, silver, gold bullion, silver bullion, and mining stocks should be in your investment portfolio right now. China, India, and Arab nations are currently getting out of dollars and into gold. Is it time for you to do the same?
God bless.
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