Best Reasons To Own Gold

I would like to give readers some information on the best reasons to own gold. If you are like many smart investors then you already know that your money needs to be in hard assets right now.

Hard assets can be a range of things from commodities to land, but gold and silver are the ultimate hard asset during times of economic uncertainty.

Why is that? To put it in simple terms, it’s because gold and silver have been money for over 6,000 years.

When people realize that paper currency is just paper, they transfer that paper for real wealth (i.e. gold and silver). People have done this for centuries, but why is it so important to do that today? It’s because never before in history has the entire worlds money supply been fiat paper currency. A fiat currency, like our dollar, just means that there is nothing backing the paper.

Well, all of the worlds currencies are fiat currencies. The only currency that is not considered fiat is the Euro, and it only has a 7% gold backing. Back in 1971, president Nixon took the U.S. off of the gold standard thereby making it impossible for foreign creditors to exchange their dollars for gold. In 1930 the price of gold was set at $20/ounce, which meant that a $1 bill was worth 1/20th the price of gold.

You could have taken a $20 bill to the bank and exchanged it for a one ounce gold coin. That is in fact how the worlds monetary system worked for hundreds of years until the creation of central banking. Gold and silver rose as a currency out of necessity, and has remained as the worlds only recognizable money for 6,000 years.

When a chicken could not be traded for a hat because the hat maker did not desire having a chicken for payment, another system of trade had to come about. Gold and silver fit that bill because it is rare, easily traded, fungible, durable, and has inherent value. When people wanted their gold and silver to be safe from thieves or whatever else could take their wealth, they would store their gold with a goldsmith for a small storage fee.

The goldsmith would simply give the depositor a paper certificate that was proof of deposit and could be redeemed for gold at any time. Over time the goldsmith realized that he had large amounts of depositor’s gold and not everyone ever came to pull out all of their gold at the same time. So, the goldsmith lent out a small portion of the gold on reserve in exchange for interest.

Over time the goldsmith realized he could lend up to 90% of the gold in his vault and collect interest on the loans. After all, there were never huge amounts of people coming to withdraw their holdings at one time, so the goldsmith could get away with it.

Once people finally caught on to the goldsmiths act, people panicked and went to redeem their paper receipts for their gold. The only problem was that there were now many more receipts in circulation than there was gold.

This is how the first run on the bank took place and also the beginning of what is known today as fractional reserve banking. It’s called fractional reserve because banks today are only required to keep a “fraction” of the customer’s reserves’ on deposit.

Out of every $100 on deposit at most banks, $90 can be lent out to customers. Just like there were runs on the banks in the great depression and other times throughout history, there will be more runs on the banks in our near future.

The banking industry is a very secretive practice, and not many people really understand the practices of our banks. It is meant to be confusing and secretive because if people understood the banking industry, they would be so outraged and disgusted that the banks would not be around for very long.

Since goldsmiths did have actual gold in their vaults and therefore real value, people who got to the banks early could get their gold coins. What is disturbing is that today if you tried to take a $20 bill to the bank and exchange it for gold they would laugh at you because dollars are not exchangeable for gold at the bank anymore.

That means that your dollar has no backing of any sort. The only thing giving your paper money value is the faith that you place in it.

It is also important to note that gold can not be inflated like dollars. If a bank decided to open and they only kept gold and silver on deposit and did not loan money against your gold and silver on deposit, then our money would be a true and sound money.

The Lakota nation bank is the only bank in the world who has done this. Since our dollars are just paper with no backing, the Federal Reserve can print as much as they want.

Since the Federal Reserve has been printing dollars like crazy, you are going to see the value of your savings and everything else denominated in dollars go down. That is why gold and silver are so important right now. Gold and silver are true money and will rise in price as an indicator of a falling dollar.

I hope you are smart enough to take the advice I am giving and buy some gold and silver to protect your wealth and hedge against inflation. The best reasons to own gold now are truly good reasons.

It’s hugely important that you prepare now for a dollar collapse, and save yourself financially while you still can. You can now grab your FREE instant download copy of “Why You Should Buy Gold Now” – created especially for the gold investment newcomer – by clicking here.