MONEY

Why Should I Own Gold?

stack-of-gold-coins

While owning physical gold may not be for everyone due to it’s cost versus one’s budget and resources, there are a number of logical and sound reasons to own some gold.


 
A few gold facts:

Gold is a chemical element with the symbol Au and atomic number 79. It is a dense, soft metal with a bright yellow color and luster – the properties of which remain without tarnishing when exposed to air or water.

According to a Smithsonian report of research conducted by the Harvard-Smithsonian Center for Astrophysics, all the Gold in the universe came from the collisions of neutron stars.

Gold has been a valuable and highly sought-after precious metal for coinage, jewelry, and other arts since long before the beginning of recorded history.

A total of 174,100 tonnes of gold have been mined in human history, according to GFMS (Gold Fields Mineral Services) as of 2012. This is roughly equivalent to 5.6 billion troy ounces.

All gold ever been mined throughout history is only equivalent to a cube 69 feet on a side.

 

Reasons To Own Gold

If you ever have the opportunity to hold an ounce of gold in your hand, to feel it’s weight and observe its luster, you will understand some of it’s value which has been recognized throughout human history.

If not a full-on collapse, difficult times lie ahead for dollar-based economies. The world is clearly moving away from the dollar (although not being reported in the U.S. mainstream), and this WILL lead to increasing devaluation of the dollar and it’s purchasing power. Translation: Things will cost more in terms of dollars. Gold (and other assets) will retain their purchasing power, and may even spike in ‘value’ as world investors flock into it during a panic stage of crisis (supply and demand).

America has lost most of it’s power base of manufacturing to other countries, such as China and others. The real power of a nation (other than it’s ability to destroy things) is it’s ability to make things. A country (a people) who loses their practical skill sets, competence, and capabilities to manufacture and self-sustain – is destined to diminish it’s value on the world stage – and it’s corresponding currency.

America has floated it’s debt on the back of the petrodollar (other nations having been ‘forced’ to purchase petroleum products with dollars). Clearly, this is coming to an end (not being reported in the U.S. mainstream) as other nations have grouped together and are forming energy alliances outside the dollar. This WILL result in further devaluation of the dollar’s purchasing power as prices will rise as more dollars ‘come home’ from abroad.

The West doesn’t have the physical gold that they say they do. Again, this is not being reported in the U.S. mainstream, but clearly (when you research this) the West has lost much of it’s gold to the East due to central bank gold price manipulation – which has enabled massive physical gold buying – draining the gold vaults of the West. The U.S. cannot even deliver Germany’s gold back to them (saying it will take at least 7-years) – supposedly a fraction of what the U.S. purportedly has in their vaults (which they obviously do not have).

China (and others) is (are) amassing physical gold at an astounding rate. Have you ever heard the following statement — “He who has the gold makes the rules”? When faith is lost or diminished in the current fiat currency (paper money backed by essentially nothing), those who have the gold will make the new rules.

Gold has ALWAYS been considered real money throughout all of human history. Gold is transferable anywhere in the world as ‘money’ whereas fiat currencies not necessarily.

The United States is burgeoning with debt, and the world knows it. With the ongoing (ZIRP) zero interest rate policies of the federal reserve, nations are diminishing their holdings of U.S. debt (Treasuries). They are also lessening their ‘dollar’ transactions amongst each other and are agreeing to exchange their own currencies or other asset arrangements between themselves.

All paper currency throughout all of history has ALWAYS (100%) returned to it’s intrinsic value (the paper itself). There has been no exception. Gold is what it is and has survived the test of time as ‘money’.

When you posses physical gold, there is no counter-party risk. It’s yours, and nothing can change what it is.

Gold can be hidden, it can be stored, and it can be transferable into a new or different monetary system.

There is only so much gold that can be extracted from the earth. The only gold left to extract is the ‘difficult to get’ kind. There is such a thing as supply and demand, and while the current demand is very high while the fiat price is manipulated low – eventually something’s got to give…

Gold cannot be debased like fiat currencies are constantly debased.

If you understand how today’s currencies work, you know that they are debt based. Dollars come into existence through debt creation. There is inherent devaluation built in to our currency.

 

 
No, you can’t eat gold… In a SHTF collapse gold’s value becomes the core of wealth preservation, given it’s history. While survival assets themselves will be the currency through a collapse, gold (and silver) will be one of the accepted exchanges for goods and services, while also providing a storage of value into the next monetary system (whatever that may be).

How much gold (or silver) should you own? I don’t know… it’s up to you and your own monetary situation. Some say 10%, some say more. It’s a judgement call.

Now is a good time to purchase gold, given it’s current suppressed price – which is (as of the date of this article) very close to the break-even cost of mining it.

Rather than obscure or rare coins, I recommend purchasing well known 1-ounce coins of silver or gold such as the American Eagle, the American Buffalo, the Canadian Maple Leaf, the Australian Kangaroo, the South African Krugerrand, etc.

If you are wondering where to purchase gold (or silver), there are a number of reputable companies that facilitate the process. I’ve used several companies, two of which are as follows.

Golden Eagle Coins

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12 Comments

  1. Above surface gold 1960 3 billion oz.
    above surface gold 2014 5+ billion oz.

    above surface silver 1960 8+ billion oz.
    above surface silver 2014 1 billion oz.

    Gold sits in vaults
    Silver is used in numerous mfg processes, thus mainly gone for good. Do the math.

  2. the sellers most silver buyers on the Kitco forums use are: APMEX….Provident….Silvertowne….Gainsville…and Aydin.

    These are popular not only because of price and service but also because of reputation of integrity.

    Silver is a better investment right now because of the silver/gold ratio. Historically silver always sold at about 16oz silver equals 1oz gold.

    However, the current ratio is about 50oz silver to 1oz of gold!! To me that means either gold is overpriced or that silver is under priced. Either way silver wins.

    Keep stacking!

    1. I have bought from JM Bullion and APMEX, and both have been great service in my experience. JM Bullion prices are a little better.

    2. I agree on silver being a better future investment from a percentage standpoint. And, the current ratio is nearly 67 to 1 (cost of silver to gold).

      Ah, the old “you can’t eat it” line.. Usually made by those who haven’t researched PM’s enough or decided they can’t or won’t be able to afford them.

      If one’s goal in a SHTF scenario is to only eat, then yes, don’t buy them and continue buying food/water. Everyone should start with the basic, (food/water/shelter/heat) commodities first. Definitely hard assets for protection as well.

      However, one of my other goals is to own a home/land outright at some point in the future and it is my belief that PM’s will be the best way to make that happen in the next 5-10 years.

      The dollar is weakening and will continue to do so; anyone doing unbiased research should see this by now.. A weakened currency throughout history has meant those with PM’s emerge with a better standard of living, provided they live through it, of course.

      Real Estate will decline, and interests will rise during an economic collapse. PM’s will likely be the only asset that will increase one’s purchasing power during that time. Yes, PM’s are being manipulated in price currently. I feel this won’t be able to last forever and when those investing in “paper” PM’s realize they won’t be able to be settled in physical, they’ll be out of luck. This manipulation is also giving those who want to buy them additional time to buy them at a discount.

      It simply depends on one’s goals when it comes to preparing. EMP/cyber attack resulting in long term electricity loss? PM’s will be of little assistance for the above scenario, (except barter….maybe).

      An economy flooded with currency due to QE, countries stopping the use of the US Dollar, both resulting in massive inflation… PM’s will help greatly.

      Banks and countries all over the world are grabbing as much gold as they can and have been for the last few years. Why? They know what’s coming. When you see what people with money are doing with their money, it’s important to take heed..

  3. Remember Gold can be bought in 1/10, 1/4, 1/2 and 1 troy ounce sizes and larger. fractional gold may be more affordable starting out and may help if TSHTF. For current value go to Kitco Spot Gold, Silver and other metals. If you buy metals, sellers will use the Kitco Spot plus mark-up.

  4. Precious metals and gemstones, like many other bartered goods, rise and fall in value dramatically as you can see with a quick ‘Net search. I personally don’t see much value in holding it; it’s too volatile for an inflation hedge or investment in my mind (you are welcome to your opinion/values). If I still travelled a lot, then I would think it a good idea to carry some for emergencies–as a barter to enable me to get home.

    Rather than buying gold or silver for bartering I would prefer to buy everything else FIRST so I don’t need to trade. Bartering reduces your security to some degree–if nothing else the party you trade with knows you have AT LEAST what he just exchanged.

    Historically, primitive peoples valued gold far less than essentials–food, water, shelter, safety–for good reason. If you-know-what really hits the fan we’re all going to be primitive again. Yes, it’s a cliche about gold/silver that you can’t eat/drink/shoot it, but most cliches are based upon a pretty good nugget (pun intended) of truth. Just my 2/100th of dollar, in copper coin, on the matter.

  5. I beg to differ about not “eating Gold”. Mine has chocolate in the middle and I pick them up at the local convenience store. I can barter these with kids for their lunch any time (smile and sarcasm). Our gubment has been lying to us and our current top leaders are intentionally destroying our nation (fundaMENTAL) change.

    1. And I’ll bet you can also eat the gold in Fort Knox – shiny gold wrappers on the outside and chocolate on the inside ;)

      Of course, they’ll never let you see it, because they’ve eaten it all already…

      1. Ken, I heartily agree with you…

        I too, and some others who have discussed it with, believe it is gone.

  6. Sources that ive talked to say that Silver is the real ticket.

    The price explosion in silver is going to be even bigger than it will be for Gold.

    > The reason is because of Rarity. The price ratio between gold and silver assumes that the same amount of silver is still around. When metals are re-evaluated this will be corrected and in addition to the inflation bust, the price ratio for silver will also increase (from about 1/67 value to somewhere in the 1/15 to 1/7 value ratio)

    > Silver is cheap and easy to get ahold of, its not going to break the bank to buy a few coins here and there. US Quarters and Dimes from 1964 or earlier contain 80-90% silver and people know this. You can expect to pay somewhere between $4-5 for the quarter and somewhere around $1.80 to $2 for the dime. Or you could just get a 1 Ounce Silver Eagle.

    > Silver is still easy to find. Less than it used to be, but you can still get it at a pawn shop for a premium (expect an extra +1/3 over spot price). Or if you’re bold you can order it from Amazon or Ebay.

    Silver will also, always be worth Something. It has industrial, electronic, and medical uses. You cant eat it, but it may be accepted as currency in some place where faith in paper money is gone (and it can be argued that it will be worth something eventually so its worth exchanging, if only for investing in that eventuality). If things get at least halfway back to normal you could trade it for its real value again.

    The same things could be said for Gold, but during the re-evaluation the price multiplier for gold will not skyrocket as much as it does for Silver. Gold might get up to $10,000 an ounce but Silver might get up to $1,500 per ounce. Investing in gold is like putting back nickels, and saving your money back at an equal worth for the future.

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