Gold derives part of its value from the fact that it can be traded across borders, as it has been for centuries. But try walking into a store today and handing out a gold coin to pay for your purchases. Gold is the metal we'll turn to when other forms of currency don't work, which means that gold will always have value in difficult and good times. I have a mini-market and a shotgun to defend my actions from looters.
If we're in some kind of post-crisis world where dinosaurs roam the Earth, I doubt I want your gold. . Why? Because, in reality, gold is also fundamentally a fiat currency. That is, people have assigned it an arbitrary value.
That value fades in a crisis, as does the value of paper money. Add gold, silver and more to get started. However, a more advantageous way to value your metals goes beyond simple accounting. When you measure your wealth in ounces instead of dollars, you win without a doubt because you've been left out of that game.
I value my precious metal possessions in the same way I value my home. I only have a general idea of what my house is worth in dollars. Since it's not for sale, a dollar number doesn't mean anything to me. I don't care if the market price is higher or lower than it was six months ago or a year ago.
My home has the most important values for me of safety, shelter and feeling. It's the paper money that changes. Metal can be melted and remelted into bars, coins, or jewelry, but metal itself is the same material that stayed on the ground for eons before being mined and refined. It offers you the same security, shelter and feeling that it has provided to humanity since ancient times.
You can't say that for a paper dollar. It hasn't always had the same value, not since the U.S. UU. It went off the gold standard 80 years ago.
In fact, that one-dollar bill began to lose value the moment the Federal Reserve began producing paper money 100 years ago. It's losing value right now as you read this, and that loss will continue. When you value your metals in ounces and not in dollars, you'll see that your paper dollar is worth what it's worth: a simple fraction of an ounce of gold or silver. You'll find that the fraction gets smaller over time.
My favorite illustration is the 25-cent gallon of gas. In 1964, a gallon of normal gasoline in the U.S. Ten, quarter and half coins prior to 1965 were still made of 90% silver in 1964, the last year in which the United States. 90% minted silver coins for circulation.
To buy a gallon of gas, you paid with a quarter of silver. Fifty years ago, that silver quarter and that gallon of gas had the same market value. However, the purchasing power fixed in that quarter of silver — its real value — is exactly the same as it was 50 years ago, and today it will continue to pay for a gallon of gas. The purchasing power of silver did not change.
It was the dollar that changed. The values of metals and the dollar do not advance at the same rate day by day with everyday prices. But over time, the illustration works perfectly. When you value metals in dollars, you miss seeing their true value as savings and insurance against economic disaster.
UU. for our high-quality educational content, our great prices and our excellent customer service. First of all, it doesn't have to have any intrinsic value. A currency only has value because we, as a society, decide that it has value.
Gold can stimulate a subjective personal experience, but it can also be objectified if adopted as an exchange system. Under the gold standard, you can ask a bank to convert your paper money into gold at the legal rate (whatever that may be). If you put together all the earrings, all the golden rulers, the small traces of gold on each computer chip, each pre-Columbian statuette, each wedding ring and cast it, it is estimated that you would have only one cube of 20 meters left, or something like that. In the 16th century, the discovery of South America and its vast gold deposits caused a huge fall in the value of gold and, therefore, an enormous increase in the price of everything else.