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Pittsburg, Kansas | Jim what you say about gold is true. It also is based on faith that someone will want to trade real goods for it.
So it boils down to which does a person have more faith in, a government issued script which can be created at zero cost (at least in digital form) in unlimited amounts, or a commodity that is limited to an annual increase of a very few percent a year based on its profitability to mine from the ground? I expect 99+ percent of the population agrees with you. I would also expect before this financial crisis is completely over that the percentage will significantly lower. Maybe down to 90 or 95 percent. If we are lucky and have a soft landing.
Paper currencies based on fractional reserve lending where most of the "currency" is actually bank created deposits created when a loan is taken out, at least in the past, have a limited shelf life. They all tend to fail at some point, or at least devalue to the point they may be called the same thing but are actually significantly different. (In the US the "greenbacks", gold called in as legal money, Bretton Woods agreement, closing of the "gold window" [USD convertible to gold], etc. as examples of partial failures). Complete failures are currencies like Zimbabwe, Weimar and soon several others like current day Venezuela currencies. Partial failures would be like the Mexican "Peso" being devalued and the newly created "New Peso". Maybe some day we will have a "New US Dollar" or maybe a world currency of some sort as a replacement. Whatever the outcome is, significant debasement if not total failure is the result.
So gold has history on its side as far as maintaining at least some value whereas government created "fiat" currencies tend to fail eventually. Gold value has never (in recorded history) went to a value of nothing. Many, many paper currencies have. A person does not buy insurance intending on using it. In fact, insurance is always bought with the intent on NOT using it.
John
Edited by John Burns 2/10/2016 07:13
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Is it to late to buy gold?
