Gold and the Struggling Economy
In a world where global markets are hurting more and more, it says something when central banks have recently starting purchasing more and more gold than ever before. It should be considered a good thing as gold is what is supposed to backing up our monetary system, however all banks only hold a fraction of gold to back up our American currency. Since the United States economy has been running on a “fait” system, meaning our currency circulates on the “faith” that each dollar is backed up by gold, such is not the case which is why we run on a credit system. Banks can no longer hold enough gold to back up our currency as the government deficit only continues to increase past a wopping 14 trillion dollars in debt to date. This debt, due to over government spending to pay for the on going war as well as the bank bail outs, more money is being printed by the Federal Reserve in order to pay off our debt.
That said, gold prices per ounce continue to increase as more and more consumers become aware of this “fait” money system. Gold, along with other precious metals, is the only tangible asset to invest in that can hedge against inflation and the weakened dollar. Our money becomes less and less valuable as gold prices continue to go up, coincidence? Not at all. The more our money becomes devalued by inflation the more people are switching to investing in the very asset that gave our money worth to begin with, gold. Gold is a very coveted and useful precious metal that has fascinated societies for centuries. Gold is also rare therefore it’s value is always high.
The way the economy is working is since our economy continues to suffer, and government spending increases to help out the hurting economy, it runs in a vicious cycle. In order for the Federal Reserve to bail out banks, interest rates may drop, but that only increases inflation. Grocery stores, gas prices and clothing alone only continue to increase dramatically where wages stay the same therefore the middle class continues to be hit as the wealth stays in the top 5% and the lower class struggles to make ends meet. In such a hurting economy how can one even begin to get ahead? Gold investment is a good decision, however of course gold is not that easy to come by, it’s expensive, but that is also why starting small is good. Purchasing gold coins here and there and letting investment dollars be gained is a good way to fight against inevitable inflation. The dollar only continues to weaken so before your bonds and monetary notes become completely worthless, start investing small into a tangible asset that will not buckle under pressure in years to come.