Hi there, and welcome back to our discussion on Investing In Gold. After having covered the basic nature of gold and the two camps surrounding it, we’re going to get a little into the history of this coveted royal metal and why it has been so important in developing modern systems of trade.
In order for us to really understand the nature of gold and why it serves a purpose in economies, we need to look at the start of the market surrounding it.
Gold As A Form Of Currency
The history of gold in its earliest form can be traced as far back as 3000 B.C, when it was being incorporated into jewelry by the Egyptians. From there, it took around another two millenniums before merchants incorporated it into their trading as a means of representing value.
Burdened with the effort of carrying goods to trade, they wanted a simple and dependable material valued by many as a basis for representing the goods that they dealt with. In other words, they took gold and turned it into money.
Following this, one can see gold’s importance grow throughout recent centuries. From the Roman empire to Medieval Britain, gold represented the basis for every new form of currency being developed. New metals representing currency were based on the value of gold. Because of gold’s basis as the cornerstone of economic development, it has come to be viewed as the symbol of wealth for countries throughout the world.
For the United States, gold represented the basis for currency. The nation developed a bimetallic standard that was put into place in 1792. Basically speaking, this system meant that every unit of money in the country had to be backed by one of the two precious metals: gold or silver. This was the gold standard, but it didn’t last forever.
Because of its waning nature, there are various factors today that allow gold to mean different things to different investors. In terms of your money, how does this effect you? What happened to the value of gold, and how is it handled today?
Stay sharp and show up next time when we discuss these things and more in part three of Investing In Gold.
Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 – 2009
{ 5 comments… read them below or add one }
Thanks for the great information, looking forward to the next instalmant
No problems Cheryl, glad you are enjoying the info. Next installment is not far away
Regards – Sean
Hi Sean,
Thanks for the history lesson. It’s really interesting. I think one of the major problems with gold is that money and credit cards have taken it’s role in our daily life.
No-one trades goods and services any more with gold. Now the good gold is just locked away.
Perhaps the gold standard to back up currencies has gone, but the world’s attachment to gold has not diminshed – witness its price now $1100+ It has been fluctuating around there for months now – and goes up when the US dollar seems to be heading down or is actually going down.
Interesting to learn the history of how gold became valuable and became a form of currency.
Gold has been used or many other things like jewelry, fillings in teeth, ornaments, etc
It is amazing how it has held it’s value.