Since the pharaohs of Egypt some 5,000 years ago, people gained financial prominence gathering jewelry and precious metals such as copper, silver, gold and platinum. Through the centuries, gold has transcended artifacts, household products, finding its way into currency as the “Gold Standard” with the passage of the Gold Standard Act in 1900.
The gold standard lasted until 1933, when Franklin D. Roosevelt outlawed private gold ownership. In 1946, the Bretton Woods System created exchange rates allowing governments to buy, sell and trade gold to the US Treasury. But in 1971, Richard Nixon ended gold trading. Since then, gold has never been used by a world economy.
Below is a list of four reasons to invest in gold as a means of hedging against currency fluctuations, hyperinflation and calamity in world markets.
1. Global Currencies are Fiat
When the Bretton Woods System ended, governments implemented the fiat currency, which is a paper currency similar to money used in the board game Monopoly. Unlike gold where a reserve is on hand in a vault or in a bank, fiat currency has no reserves. In simpler terms, paper currency whether $100, $50 or $1,000 Euros, means absolutely nothing.
Fiat currencies are unstable and are dictated by world governments. If the US finds themselves short of revenues, the Federal Reserve can print more money. No questions asked!
2. Get What You Pay For
Investing in precious metals such as gold and silver are smart choices because actual gold and silver can be delivered to your front door step. I don’t sell gold coins or bullion or precious metals but specialists at IRA Gold can. They can provide expert advice on anything gold related, gold investment choices, in-depth consultations and sound investment strategies. Hedge your investment portfolio with gold investments. You’ll be glad you did.
3. Maximize Profits, Minimize Risk
Investing in the stock market, foreign exchange, commodities, real estate or in futures comes with risk. Despite your knowledge of economics, risk cannot be removed. But it can be mitigated. Though maximizing profits is essential to investing, one must weigh the risk involved. The riskier the transaction, the bigger the profit but why risk hard earned money in a system where others dictate the winners and losers?
Gold investments offer stable returns and a tangible product. If fiat currencies fail what happens to gold? Simple economics – supply goes down, demand goes up. Demand goes up, prices goes up. That’s the beauty of hedging your stock portfolio with gold.
4. Gold Survives
You can’t go wrong investing in gold bullions purchased from private companies or the central bank. If not gold bullions than invest in gold and silver coins bought from certified dealers listed by The United States Mint. An investment in gold will last the test of time as it did centuries ago. If it lasted this long, what’s the likelihood it will last another 5, 10 or 15,000 years? I’d said say, “Pretty good.”