Now that we’re back, dealing with the subject of Investing In Gold and how it once represented money, we’re going to continue by discussing what it means in terms of wealth creation in relation to cash, and how it represents investment potential in today’s global economy, with all aspects considered.
Gold has come and gone in many different counties, and today it no longer holds a presence as the backbone of any currency.
Money Vs Gold
The value of money is relative to the amount that is produced, and gold sits on the sidelines while inflation and deflation create changes in the prices of goods. However, gold is gold, and this is exactly why it is still important today.
Gold has preserved wealth throughout thousands of years. This is due to the fact that largely, gold maintains a static value while paper money changes.
Let’s say for instance that 30 years ago you had a twenty dollar bill, and twenty dollars worth of gold. If you held on to that twenty until today, you’ll find that it can be spent purchasing considerably less than it did three decades ago. As for the gold, paper money scales to match its value still, meaning the gold would be worth far more than twenty dollars when traded today.
That means a lot for your money. With that said, gold works as protection against inflation. When the dollar weakens, gold only grows stronger in terms of worth. It stays the same while the paper money changes around it. This gives it the property of acting as a hedge against declining currency values and inflation.
For investors such as yourself, what this means for your money is that when it loses value, you can position your investments in gold to maintain the value of your finances. As a hard asset, it protects your money by having something to show for it objectively.
Even though people feel differently about it, Investing In Gold maintains a considerable presence in the world of investments. For the next article, we’re going deep into how this affects your money and why you should consider investing in gold as your next source of safety when it comes to preserving your wealth.
See you next week for part five of Investing In Gold.
Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 – 2009
{ 3 comments… read them below or add one }
Hi Sean,
Okay, so when the value of the dollar is dropping, you should buy gold every time? Is this the same as when it’s a slowing economy and the price of housing drops, you should buy real estate?
I understand that gold maintains its value over time. Is there ever anything that makes the price of gold drop significantly?
I too would like to know that answer Jazz – what does make it drop significantly? In the two or so years before the economic downturn started (2008) gold rose up and down like a yo yo – well under $1000. But. as soon as the economic downturn got under way – it has risen to $1000+ I am pretty certain theat gold investors play gold against the value of the USD
Now I am starting to see gold differently. You say gold works as protection against inflation. Do you think gold will always hold that value?
Gold seems to be able to hold it’s value, even if the price of it fluctuates, it seems to be a valuable backstop. I will read on.