Why Invest in Gold?
You know, of course that paper money is just a symbol.Â Although considered “legal tender” paper monies, called bank notes,Â merely represent the real assets of the issuing country.Â It is cheaper to make paper money than it is to mint coins, plus paper money is a whole lot lighter and easier to carry around — but not so easy to lug that we haven’t also devised a system of checks and plastic cards.Â Almost nobody carries “real” wealth.
Should a government fail, then all of the symbolic monies of that government fail as well.Â That coffee can of paper money grandpa buried in the backyard is only as safe as the government’s economic standing.Â If he instead used that money to Buy Gold, the gold price may indeed rise and fall but the metal itself will not lose its real value even if the government that minted the coin should fail.
People have been hording gold for 6000 years, not as a “get rich quick” investment, but as a hedge against total poverty. My parents kept solid silver dollars. Some folks like to save Swiss francs. As for me, the only gold I have squirreled away is a couple of pieces of jewelry, but after Amoeba’s post today, I may just be rethinking that.
Excellent point. As long as you have gold you’ll never be broke unless the gold is locked up in a vault, stolen or taken away by force. Happily, though, the government is there to protect our property and the financial system will make loans against the gold in the vault.
Doug — pretty much why I don’t have any. One has to have the power to protect the assets in order to have the assets.
Very true ! people who had gold (jewelry or whatever, never were hungry after the WW II they could exchange it against eggs, potatoes and if luck some meat. That’s why later my mother became a jewelry fan, she had never forgotten that.
Gattina — I worked for a guy who had a whole house full of jewelry and coins for just that reason.
My father collected gold coins too. He was a teenager whose family lost too much in the Great Depression, and he never forgot.
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