MONEY

Why Gold Is The Most Sought After Metal On Earth

stack-of-gold-coins

Did you know that gold was not ‘born’ on Earth? It is said that a collision of neutron stars or supernova explosions may be the origin of the yellow metal.

So how did the yellow metal we call gold become the most sought after on Earth?


 
Gold was one of the first metals discovered and it was found in pure native form such as nuggets or flakes.

Gold was used ornamentally because it is malleable and ductile.

Gold’s permanence and luster that linked it to concepts such as royalty and immortality. Gold does not tarnish or corrode.

Over time, gold became synonymous with wealth and power.

Gold was used to facilitate the ancient trade of barter. Money.

The first people to mint gold coins were what is now Turkey. Then the Chinese. Then the Greeks. Then the Romans.

During Roman times, the silver to gold ratio was 12:1.

The Romans were first to debase the metal due to the Empire’s excessive spending. They added base metals to the gold (and silver) to make it easier to pay their debts (sound familiar? only this time with money ‘printing’).

The debasement of Roman currency is one of the reasons as a cause for the downfall of the Empire.

 
Civilizations have chosen to use gold as money because —

Gold is rare
Gold is malleable and soft
Gold has intrinsic value
Gold is immortal
Gold is easy to identify
Gold meets all the properties of money

 
However with the inventions of banking and paper currency, the role of gold began to transform.

A gold standard is a monetary system in which the standard economic unit of account is based on a fixed quantity of gold. This allowed for a fixed exchange rate between countries.

President Roosevelt in 1933 issued Executive Order 6102 which criminalized the possession of any monetary gold. All gold owned by United States citizens was to be delivered to the Federal Reserve.

Between 1945 and 1971, the Bretton Woods system was a form of the gold exchange standard whereby a country guarantees a fixed exchange rate to the currency of another country that is on the gold standard. During this period, one ounce of gold was valued at $35.

In 1971, President Nixon ended the convertibility of gold to US dollars. This began the era of FIAT CURRENCY and allowed the gold price to ‘float’.

Despite gold no longer being the basis of the modern monetary system, countries still choose to hold TRILLIONS OF DOLLARS worth of gold in their reserves.

Today there is more demand for gold than ever before.

 
Gold Facts:

Gold is the most malleable metal. One ounce of gold can be hammered into a single sheet (30 ft by 30 ft).

Gold is the most ductile metal. One ounce of gold can be stretched to a length of 50 miles.

Gold is a noble metal which resists degradation by air, moisture, or acidic conditions.

Gold is so rare that the amount of gold mined since the dawn of time could all fit in a (69 ft) cube.

 
Some data sourced from goldcorp.com

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12 Comments

  1. Just reading this, it sounds as if it is still illegal to own gold. In 1974, President Ford signed a bill to make it legal to own gold again.

    1. …and both are good choices, along with all other tangibles of preparedness supplies, etc.

      One positive aspect of holding Gold (and/or Silver) include its inherent and historical value as a medium of holding one’s excess ‘money’ (if one is fortunate enough to do so), whereas any ‘paper’ currency, stocks, or other such ‘modern’ investment has the potential to fall in value – even to zero – making it particularly desirable during times of uncertainty. No, you can’t eat gold, but pretty much anywhere in the world it is recognized as ‘money’.

  2. I believe that in true times of crisis the most important thing you can have is knowledge. It can be traded for things you want,instead of things you need. In prepping, such as in life, if a person takes care of their needs first and their wants second you should be ok.

  3. In a total collapse you would have a hard time trading gold for food or ammo. It would be a 100 times better than paper money. Pretty soon we will be using paper money for toilet paper. I like to keep a small amount of silver for trading.

  4. If people cannot feed their families and you can feed yours you probably aren’t going to trade anything you have for metal. When people get scared they act on emotion rather than rational thinking. If you keep your cool during any situation you can usually come out on top. The most valuable piece of equipment you can ever have is between your ears and south of your scalp.In my geographic location cows outnumber people about 3:1 while everyone else is eating freeze dried whatever me and my family will be dining on steak. Something else nothing is ever truly yours unless you can defend it. In a collapse how many people will run to FEMA camps leaving all their possessions? My kingdom for a candybar? Most people are reliant on the federal government for everyday life essentials. If they ever had to fend for themselves they would perish. At one time I had no idea people were this clueless about so much. I’m no genius by any sretch of the imagination but I have very little doubt my family will survive.

  5. These are all good thoughts… although I guess it all depends on what type of “collapse” occurs…. and at what stage you are thinking about. (eg. a scenario where electricity is gone for years vs US financial depression, etc). There were phases of the Argentina financial crisis when gold was used for trade. People would cut links of their chains to make smaller denominations. Perhaps it is good not to have all your chickens in one basket.

  6. They say you can’t eat gold but I sure don’t much nutrition in a 5 dollar bill or even a 20 for that fact. Any of it has to be traded to get food value.

  7. Trade your gold for wealth. Use your money to buy wealth. What would you buy with your gold and money after things fall apart? Why wait to buy what you will not be able to buy? Can you buy what cannot be found? Think you can buy things..when no one wants to sell things? Think about what is real wealth in times when money isn’t. What is a wealthy man, when all money is worthless? Seek to be that wealthy person, whose wealth has nothing to do with currency or soft metals. One can keep 500,000 Dollars in the bank until it is worth nothing and you lose everything, or the bank takes it from you. You can take the money and buy gold, which the Government will confiscate and make illegal to own. In the dark, a wealthy man has a candle. In a storm, a wealthy man has strong shelter. When people are starving, a wealthy man has a full belly. A wealthy man is offered gold and currency in exchange for tendering some of his wealth…but, why exchange SYMBOLS of wealth..for the real thing?

  8. You should have food, water, defense, and all those things in order before buying any PM’S.

  9. Found these statements from Marc Faber on Bloomberg. He predicts confidence will be lost in central banks this year. (We can only hope.)

    “I’m positive that gold will go up substantially in 2015 — say 30%,”

    “My belief is that the big surprise this year is that investor confidence in central banks collapses. And when that happens — I can’t short central banks, although I’d really like to, and the only way to short them is to go long gold, silver and platinum,” he said. “That’s the only way. That’s something I will do.”