subject: Is There A Good Reason To Buy Gold Bullion? [print this page] Is There A Good Reason To Buy Gold Bullion?
There are several very good reasons to buy gold bullion. Some are based on historical findings and some are just good common sense. The troubled economical climate today makes it almost imperative to begin to buy gold bullion if you can. To understand why this statement is true you need to understand how the world currency works.
1. Currency not under government control: Gold and silver are the only two currencies not under government control. This means that when you buy gold bullion you are buying a currency that is good in any country. It has a value that is independent of any government decree.
2. Fiat currency: After 1971 almost all government currencies were fiat currency. From that time on there was no additional gold held in reserve to back the value of the currency governments printed. Fiat currency has value only because a government says that it does. This works well unless the government begins to create too much of the fiat currency. However, history shows that almost all governments at one time or another do create too much fiat currency. This means that the currency is worth less than it once was and if carried too far can become worthless. At this time the only fiat currencies that have not collapsed are the ones still in use today.
3. What may happen: In 1971 the US dollar was worth approximately 1/35 of an ounce of gold. By 2004 after more than 30 years of fiat currency, the US dollar was worth 1/400 of an ounce of gold. You can see where this is going. As the price of gold continues to increase the value of the fiat currency continues to drop.
This is where the common sense part of the reason to buy gold bullion now comes into play. By following the logic of the step above, it makes much more sense to buy gold bullion while the price is rising. No one has seen any signs that the economic troubles in the world are decreasing. This would seem to point to a common sense decision to buy gold bullion in order to protect your money. Many people fail to believe that the economy is really in trouble. They keep blindly hoping that something will happen to stabilize it. What harm could it do to buy gold bullion now and be prepared in case of disaster?
