Why Buy Gold and Silver?

As you read this, the US government is piling on more debt, which at the moment stands at $63 trillion. What does this mean for you? As the Federal Reserve continues to print more money, it will cut into the purchasing power of the dollar, and inflation will spin out of control. This happened to Germany following World War I, when it took a wheelbarrow of German marks to purchase one loaf of bread.

Pros and Cons of Buying Gold and Silver

Financial markets have always been uncertain; it is the nature of the beast. But in today’s world of globalization, economic health can get more out of whack than ever before. This just might be a good time to smooth out some of that insecurity by investing in gold, also known as the money of last resort. Not only would you protect yourself against the falling dollar, but you could make a hefty profit in precious metals. Here are the best reasons for converting your money into gold:

• Troubled times in the United States’ fiscal gap.

As you read this, the US government is piling on more debt, which at the moment stands at $63 trillion. What does this mean for you? As the Federal Reserve continues to print more money, it will cut into the purchasing power of the dollar, and inflation will spin out of control. This happened to Germany following World War I, when it took a wheelbarrow of German marks to purchase one loaf of bread.

• Troubled times in the macroeconomic investment climate.

Kuwait has just announced that their currency will not be pegged to the dollar. China has sold off at least 1 billion in US Treasury Notes, as Venezuela and the United Arab Emirates replace their dollar reserves with the euro. The signal coming from other governments is a warning sign; our dependence on foreign bond buyers to finance domestic consumption is rapidly coming apart. The United States’ economy is held together with baling wire and duct tape.

• Supply and Demand.

While mining companies continue to extract gold, production cannot keep pace with demand. From 1992 to 2005 world output totaled 1.1 billion ounces. Reserves are barely half that size, and dwindling. Large mining companies must scramble to keep up production, turning to the junior mining segment for exploration and discovery. But between 1985 and 2003 new discoveries had slipped by 30 per cent. Basic economics tells us that when supply cannot meet demand, the value increases.

• Historical value.

Gold cannot be made. It is what it is. That is why the value of gold has been used for over 5,000 years. In his speech, Anthony S. Fell, a leading banker with the Royal Bank of Canada, stated the following:

“To some extent, I regret to say, all paper currencies are becoming somewhat suspect, and accordingly, it is my view that gold bullion, rather than being the barbarous relic described by John Maynard Keynes, may well become the asset of choice for many investors over the coming decade…notwithstanding the modest rise in gold prices over the past few years, that is where gold bullion is today, and it represents great opportunity.”

• Gold is the great stabilizer for all economies.

Gold inhibits governments from printing money and placing the citizenry in debt. It prevents the devaluation of currency brought about by inflation, and increases the wealth of nations. Gold provides protection from abusive usury, encourages savings, and puts and end to taxation and the exploitation of the world’s population.

Investing in precious metals is the only safe haven against a falling currency. The U.S. Dollar index has fallen 30 per cent since 2001, while gold and silver have more than doubled in value.

Since 1913, when the Federal Reserve became the issuer of American currency, the dollar has lost 98 per cent of its value.

The question arises, should you be investing in paper assets, or gold?

People often turn to gold to store their wealth for the following very good reasons:

Gold is very compact - taking up very little space for the value of money Gold is easy to store - it doesn't rust, decay or dissolve Gold can easily be traded - gold has long been used as currency, being traded for other goods or services

Gold is independent - it can be transferred into any other currency in the world

Gold maintains a steady value - the price of gold may change but this is more a reflection of the inflation or deflation of a given currency.

Gold maintains a very stable value - where modern paper currencies fluctuate greatly and can become worthless very quickly (See Argentina Hyper-Inflation of 1980-2000)

Gold is not traceable - it doesn't have micro chips, serial numbers that are tracked, etc

Gold is not taxed - while you may pay sales tax to purchase it, it is not taxed as property (like your home or real estate)

Gold has no inheritance tax either - because it is untraceable and is a simple possession

Quotes on Why Invest in Gold

"Gold is money. That's it". - J.P. Morgan

"Deficit spending is simply a scheme for the 'hidden' confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights." - Alan Greenspan

"Gold still represents the ultimate form of payment in the world. Germany in 1944 could buy materials during the war only with gold. Fiat money in extremis is accepted by nobody. Gold is always accepted." - Alan Greenspan 1999

"There can be no other criterion, no other standard than gold. Yes, gold which never changes, which can be shaped into lingots, bars, coins, which has no nationality and which is eternally and universally accepted as the unalterable fiduciary value par excellence." - Charles De Gaulle

"There are about three hundred economists in the world who are against gold, and they think that gold is a barbarous relic - and they might be right. Unfortunately, there are three billion inhabitants of the world who believe in gold." - Janos Fekete