subject: How Gold And Silver Bullion Offers Tremendous Financial Stability [print this page] Most of the general populace buys into the currency myth, believing that money has some innate value. The truth is that currency is simply a representation of goods and services. Paper money offers a physical symbol of something that in some cases may not even exist.
Even when the items are real, their value can change in an instant. The recent housing bust and current recession underscore this point. A home purchased for $200,000 ten years ago may sell for less than $125,000 today, if it can be sold at all.
This intense fluctuation affects nearly every market, with one notable exception: precious metals. U.S. currency was completely backed by gold prior to the early 1900's, and gold, silver and other precious metals continue to be used in the manufacture of everything from jewelry to electronics.
The dollar is considered a fiat currency, meaning that its value is determined by a regulating government body. Currency has no innate value, but gold and silver bullion do, and will continue to maintain that value for the foreseeable future.
A History of Stability
Dot com investors during the internet boom likely felt unstoppable. After all, the Internet was the future. How could it possibly be dangerous to invest in something that people would be using forever?
They soon learned the fallacy of that approach. There will always be another Facebook to come along and replace Myspace. The cycle may be longer in some cases, but investments of this sort are not tangible. They aren't backed by anything in the real world.
Precious metals, on the other hand, are completely tangible, and thus have never been subject to the unpredictable and sometimes extreme fluctuations that affect other types of investments. A big part of the reason for this is their non-renewable nature.
While currency can be printed on a government's whim and most physical goods can be manufactured indefinitely, only a finite amount of gold, silver and other precious metals exists, or will ever exist. This fact grants gold and silver bullion unprecedented stability.
The economics of simple supply and demand guarantee precious metals will always offer more safety than any other investment. In a world where the economy fluctuates constantly and recessions crash markets once thought to be untouchable, investments backed by nonrenewable physical goods like gold and silver bullion offer the best guarantee of long-term stability.
