7 Solid Advantages of Owning Gold – #2 Protects Against Inflation

 

As a Wealth Coach, when I sit down with a new client to map out their wealth blueprint and strategic prosperity plan – I know that the easiest thing I have to explain to them is how gold will protect them against inflation the way no other investment will.

Why?

Because gold holds its value; it always has and it always will. While there may be conflicting opinions on gold as an investment – there simply isn’t any arguing that gold does not lose its purchasing power, ever. In a financial market that has been, is, and will continue to be rocked by world events, skyrocketing debt, political crises, and financial meltdowns – gold truly shines as the one safe haven – and I mean that literally.

How to Invest Your Hard-Earned Money Confidently

It can be hard to talk about investing your hard-earned money when confidence in the world’s governments is at an all-time low, and whatever trust or belief there was in central banking systems has been seriously eroded by an unprecedented series of credit crises. My clients are wary and often confused about how to invest, where to invest, and how to keep their money safe.

Again – why?

Because the U.S. and the European Union has been and is being rocked by an ongoing series of monetary debacles. Open the newspaper on any given day, and count the number of calamities, failures, fiascoes, defeats, crashes, and general all-round disasters that are occurring in one monetary system or another around the world. Trying to track the rise and fall of the world’s paper currencies, stocks, and bonds is like trying to track the marble in an old-fashioned pinball machine. Remember those? Shoot a marble out of a slot and watch it zip up and onto the play board, bank off a rubber bumper, bounce, hit a pin, get stuck in a slot, spit out, shot up, right, left, down, and center? It was fast and exciting – with dinging buzzers, bells and flashing lights. But where did the ball end up? Down the hole. Always – down the hole. Just where every paper currency in history has gone for centuries; and the clock is ticking on the one we’ve got now. There isn’t a pinball – or currency – in history that can stay in play indefinitely.

Unless you’re talking about gold.

Gold is Inflation-Proof

Some may argue that the gold market is volatile – but what they can’t argue against is that – for all intents and purposes – gold is inflation-proof. Just focusing on the last 60 years or so – U.S. inflation was highest in 1946, 1974, 1975, 1979, and 1980. During those five years the real return on the Dow Jones Industrial Average was 12.33%. Want to know what it was for gold? 130.4%. That’s right – the return on gold was over 110% during some of the worst periods of economic inflation in this century.

And when deflation occurs and businesses go broke as prices go down – the way it did during the Great Depression of the 1930’s – the relative purchasing power of gold still climbed. Historically – whenever the value of paper in the form of money, stocks, and/or bonds goes down – gold goes up. Not just most of the time: every time.

Why again?

Gold Anchors the World’s Currencies

Because the value of gold isn’t shaken by the economic policies or inflation rates of any country. That’s why gold has been dubbed the “crisis commodity;” when geopolitical tensions rise – gold hangs tough and generally outperforms other investments. Gold is what anchors the world’s currencies.

No matter what the rate of exchange may be, or what the comparative value of a dollar is compared to other countries – an ounce of gold will buy the same 350 loaves of bread today that it bought during King Nebuchadnezzar’s reign around 400 B.C., which would be around 2,414 years ago. Now, I don’t know what the bread 2500 years ago was like, but today an ounce of gold buys a pretty “good, nutritional” kind of bread – not Wonderbread (no offense and it was my own personal favorite as a kid – but nutritionally – oh well). The point is still that it bought 350 loaves of bread then – and it buys 350 loaves of bread now.

Why has gold retained its intrinsic value over thousands of years? Because

 

  1. Gold can’t be created or printed, counterfeited, or reproduced
  2. Gold doesn’t need to be tended, fed, watered, maintained or kept alive
  3. Gold has no time limit or expiration date
  4. Gold is easily converted into whatever currency you need
  5. Gold is portable – you can hold $50,000 of it in one hand
  6. Gold is internationally accepted – it will buy what you need anyplace in the world
  7. Gold lasts for thousands of years; it doesn’t degrade or deteriorate

Having Gold Means Having the Power to Provide

Gold is more than just a hedge against inflation – gold preserves your purchasing power. No matter what’s going on with the world’s currencies, governments, or economic infrastructure – gold can be used to purchase food, housing, protection, clothing – anything and everything needed for basic survival and then some. Not only that, gold buys the equivalent amount – or far more – of the same commodity anywhere you go. Gold is the only truly international, global form of currency, recognized and valued uniformly by every country, everywhere in the world.

Learn How to Shield Your Money and Your Investments

If you would like to learn more about how gold can secure and shield your money and other investments – give me a call, make an appointment – come on in, sit and let’s have a chat about it. It might be time to really look at what your financial strategies are, and if they’re truly as diverse as you think – or want them – to be. Gold is more than just a valuable commodity to me, and to everyone I work with. It’s a philosophy, if you will, one that I believe in – because gold is the one commodity that’s never let me down. Ever.

Gold is something I’ve built my own life and financial security around, and that’s why I enjoy helping people understand how it can underwrite and build the substructure of their wealth portfolio – starting with that all-important firewall against inflation.