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10 Reasons You
Should Invest in
Gold
Gold
1. Gold is a Liquid Asset
The liquidity of an asset is determined by the
amount of time it takes to be converted to
currency or other assets. Precious metals have
the ability of being sold for virtually any other
form of currency, without the delays associated
with other hard assets. As an example, you may
find it takes a lengthy period of time to sell a
real estate property, but precious metals can
be liquidated virtually anywhere, at any time.
Not only is your investment always liquid, but
it is also divisible and maintains a transparent
universal value.
wrote, “It is impossible to grasp the meaning of the
idea of sound money if one does not realize that it
was devised as an instrument for the protection of
civil liberties against despotic inroads on the part
of governments. Ideologically it belongs in the
same class with political constitutions and bills of
rights.” Gold is a much sought-after commodity,
which is fair value to one and all; individuals or
governments can rarely manipulate its value. No
one is able to substantially diminish the effect of
gold on sound currency.
2. Gold Has Universal Value
4. Central Banks are Buying Gold
Mankind has always recognized gold and silver
as real wealth. Though gold and silver have
always been treasured for their decorative value,
precious metals have been used pragmatically
in the form of weapons, semi-conductors, and
much more. Gold is one of the current coinage
metals and formed the basis for the gold standard
used before the discontinuance of the global gold
standard in 1971.
We now have not one but two of the largest
central banks of the world injecting massive
amounts of cash into their banking systems. The
relentless injection of capitol by the Fed, and
now the European Monetary Union, will cause
the dike of inflation to eventually burst under this
monetarypressure. The majority of economists
see no way to avoid an inflationary season,
causing the next phase in the gold market to have
a massive increase. This has led
There has never been a fiat currency that
to central banks aggressively
retained purchasing power for a significant buying gold. The global debt is
unmanageable, and countries
period of time.
will have no choice but to inflate.
China, Russia, India, and Mexico
3. Gold is an Expression of Liberty
are a few, among many countries, that have
One of the reasons, if not the main reason, for the
recently announced their plans to increase gold
government’s encroachment on civil liberties is
reserves. From 2005 until the present, China leads
the abandonment of sound money. Decades ago,
the charge in gold purchases since they hold the
Ludwig von Mises, the great Austrian economist
most US dollars next to the Fed.
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10 Reasons You Should Invest in Gold
In 2001, the central banks were forced to start
buying massive quantities of gold; the Fed went
on a printing spree of capital to fund the economy,
while our country’s debt grew massively because
of 9/11, Homeland Security and the war on
terrorism, as well as the devastation of Hurricanes
Katrina and Rita in New Orleans and Texas.
Additionally, tax incentive checks were issued two
times. Then, in 2008, over $4 trillion was created
and issued to bail out the banking system, while
the debt of the U.S. government at least doubled
in three years from $7.3 trillion to over $14.2
trillion. Since 2011 our government spending has
stating, “This activity reflected a continued
desire among central banks to diversify their
sizeable reserves in light of credit downgrades
which have brought into question the safety
of holding massive amounts of U.S. dollars
and euro-denominated reserves.” Central
banks have moved massive amounts of money
into gold. In fact, central banks have bought
more gold in a recent four year span than at
any previous time since 1962. This aggressive
buying of gold by central banks has
The global debt is unmanageable
caused the value of gold to increase
and countries will have no choice but
from below $300 to where it is today.
Historically, central banks have been
to inflate.
the biggest buyers of dollars, but are
snowballed past manageable levels to over $17
now sellers of dollars, and the biggest buyers
trillion. Projections are that when Obama leaves
of gold. A wise investor can learn from the
office the debt will be around $23 trillion. Central
central banks. As long as our debt remains
banks operate with forward thinking, and they
unmanageable, both domestic and global, it
foresee massive inflationary pressure. According
makes prudent sense to have physical gold in
to the World Gold Council report, central banks,
your portfolio.
along with official institutions in 2011, proved
that gold was a vital investment by increasing
their holding 571%. The report went on to speak
to the buying mindset of these institutions by
10 Reasons You Should Invest in Gold
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5. Gold is Real Money That Retains
Purchasing Power
Fiat currencies (currencies without physical
backing) are infllated until they are as worthless
as the paper on which they are printed. Alan
Greenspan, former Chairman of the Deferal
Reserve once said “All fiat currencies must find
their way to gold”. Gold is an asset and therefore
cannot become an inherited governemnt liability
as notes of promise to pay. Inflation is often a
consequence of the use of paper money systems
that are not redeemable in real assets such as
gold and silver. The illusion of wealth is what
fiat dollars represent whie the real value of gold
remains. One ounce of gold, worth approximately
$20 in the 1920’s, could buy a man a fine dress
suit and a night on the town. An ounce of gold will
still purchase the same today, whereas a $20 bill
would not even be enough to pay for the suit’s
alterations.
Gold coins act as insurance. As a nation we
have been hurt financially by our national use
of non-gold backed paper money since 1971. In
addition, unlimited paper dollar printing and
excessive government spending have further
impacted the issue.
If you believe inflation is coming, then the most
effective way to protect yourself, historically,
within this environment, is to buy gold. The
previous inflationary environment lasted for
more than five years during the 1970s. This
resulted in gold moving over 500% in the
bullion markets. Currently, the debt to GDP of
the United States is much greater than in the
70s. If history has any merit, it is fair to say that
we should experience some sort of this kind of
inflationary pressure again. Furthermore, many
economists feel it could possibly
be much greater than the previous
inflationary environment in length
“All fiat currencies must find their of time or severity.
way to gold” - Alan Greenspan
In virtually any economy, gold and
silver are real money!
6. Gold is Wealth Insurance
When you diversify into gold, you are protecting
and insuring the present and future buying power
of your hard earned money. Just as you would
not consider driving a car without auto insurance,
it is extremely unwise to not have savings and
investment money “insurance”.
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10 Reasons You Should Invest in Gold
7. Gold Diversifies Portfolios and
Lowers Risk
passed in 1997 allowing the inclusion of gold
in IRAs. Lombra’s report explained that over
the 1974-1993 period the “inclusion of 5% gold
and 5% rare coins in a diversified portfolio of
financial assets would have increased portfolio
performance without increasing portfolio risk”.
8. Timing and Supply Favor Gold
Historically, when any government adopts a
fiat or paper monetary system and monetizes
the debt, it overspends far beyond the public’s
means. This practice accumulates staggering
sums of debt and handicaps the primary
functions of government and private enterprise.
Changing the behavior of the government by the
will of the voters is a very slow process. Rather
than rely on the officials in Washington D.C. to
fix the economy and the skyrocketing national
debt, you can do something now to protect
your individual wealth by purchasing physical
gold and silver and/or by investing your IRA
retirement funds into precious metals.
9. IRAs and other Retirement
Accounts Can Own Gold
The U.S. government allows existing IRAs,
401(k)s, and other retirement investment plans to
own physical gold and silver. Republic Monetary
Exchange can help you roll over your existing
retirement plan into a self-directed plan, invested
in gold and silver, with no tax penalty. Skeptics
complain that gold does not earn interest.
Historically, gold is a hedge against inflation, more
so than interest to be paid on fiat currencies. Even
though it doesn’t earn nominal interest, gold
continues to be a safe insurance against
currency devaluation, inflation, and
changes in currency.
Economist, Dr. Raymond Lombra, presented
a 40-page report to U.S. Congress that
demonstrated the benefits of including rare
coins and gold in Individual Retirement
Accounts (IRAs). The Lombra report served as
the investment rationale for the legislation that
10 Reasons You Should Invest in Gold
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10. Gold Stands the Test of Time
Regardless of domestic currencies that have
evolved over time, gold has a 6,000 year track
record, and will always be recognized as a
dependable source of value. Our founding
fathers owned gold and traded it as a medium
of exchange both here and abroad. In fact, the
founding fathers never intended for the country to
use a currency other than gold and silver. Article
1, Section 10 of the U.S. Constitution reads, “No
debt shall emit bills of credit (or) make anything
but gold and silver coin a tender in payment
of debts”. The founding fathers knew that if
governments printed money backed by nothing,
the governments would overspend and overprint,
thus devaluing the currency. Today, these actions
have caused inflation, and our economy is slowly
deteriorating. This has been happening for
decades and is now accelerating at record pace.
Fiat money has never retained purchasing power
for a significant period of time. In 1971, President
Nixon dropped our nation from the gold standard
and converted our currency to fiat money. Our
currency, which is no longer backed by gold, is
largely responsible for massive inflation. When
Nixon abandoned the gold standard, the price of
gold was $42 per ounce, much less than the price
of one ounce of gold today. Meanwhile, in 1971,
a gallon of gas could be purchased for around
$0.30, a new Ford car for around $3,000, and an
average house for approximately $25,000. This
massive devaluation of our currency is all due to
the inflation of which Thomas Jefferson and the
other founding fathers warned us. It is not too
late to exchange a portion of our paper assets for
hard assets such as gold and silver to protect your
wealth from this continuing devaluation.
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10 Reasons You Should Invest in Gold
10 Reasons You Should Invest in Gold
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