Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

Five Reasons to Buy Gold

  by    0   0

Despite what Warren Buffet might tell you, there are good reasons to buy gold.

In a speech several decades ago, the billionaire basically called the yellow metal useless.

[Gold] gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again, and pay people to stand around guarding it. It has no utility.”

In the first place, the statement is patently false. Gold is increasingly being used in technological applications from biomedical processes to energy production. But even if Buffet was right and there were no practical uses for the yellow metal, there would still be good reasons to buy gold – starting with the fact that gold is money.

Here are five reasons to own gold gleaned from a Forbes article by analyst Olivier Garret.

  1. Gold is money – Gold possesses all of the characteristics of money Aristotle listed 2,000 years ago. The philosopher said sound money must be durable, portable, divisible, and have intrinsic value. You can check off all four of these characteristics for gold. You might also want to add one characteristic to Aristotle’s list. Sound money cannot be easily manipulated by central bankers – i.e. created out of thin air. That’s why the yellow metal has held its value over time while fiat currencies have fallen in value.
  2. The dollar has devalued over time –  Speaking of falling in value, the dollar has lost 86% of its purchasing power over the last 50 years. So while it may be “strong” compared to other fiat currencies, the mighty dollar has lost much of its actual strength. It’s like saying a 5-year-old is strong compared to other 5-year-olds. Looking at it another way, the price of gold has increased 2,400% since 1972.
  3. Real interest rates are still negative – The Fed has been nudging up interest rates, but the the nominal interest rate minus inflation remains in negative territory. In the first quarter of 2017, inflation averaged a little over 2.5%. A one-year bank CD currently pays about 1.25%. People complain that gold has no yield, but no yield is better than negative yield.
  4. Gold has no counterparty risk – Fiat currency carries significant counterparty risk. In other words, the government behind the currency could “default,” leaving you holding worthless paper. The value of a dollar depends on Uncle Sam keeping his promises. There is no party behind gold. Once you possesses the metal, you don’t have to depend on anybody else to fulfill a contract or keep a promise in order for it to sustain its value.
  5. Diversification – As the saying goes, you don’t want to put all of your eggs in one basket. Gold provides diversification to your portfolio. A major crash will make you glad you own some gold.

Get Peter Schiff’s most important Gold headlines once per week – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!


Related Posts

Stagflation Warning: Atlanta Fed GDP Estimate at 0.5%

As governments shut down the economy in response to COVID-19 and the Federal Reserve put money printing into hyperdrive, we warned that it was a recipe for stagflation. Today, it looks like stagnation is here. Stagflation is an economic environment with rapidly rising prices, a weak labor market, and low GDP growth. It’s looking more […]

READ MORE →

Chinese Gold Demand Continues to Strengthen

Gold demand in China was up in September, as the country approaches a peak gold-buying season. Both gold withdrawals from the Shanghai Gold Exchange (SGE) in September and gold imports in August were up, a sign that the Chinese gold market continues to recover after it was hit hard by the coronavirus pandemic.

READ MORE →

JP Morgan Chase CEO Worried About Higher Than Expected Inflation

With CPI data once again coming in hotter than expected, it’s getting harder and harder for the mainstream to swallow the “transitory inflation” narrative. And some people are starting to worry. During an earnings call, JPMorgan Chase CEO Jamie Dimon expressed concerns about higher than expected and persistent inflation ahead.

READ MORE →

American Consumers Continue to Run up Credit Card Debt

Consumer borrowing has slowed somewhat from the record level we saw in June, but Americans continue to pile on the debt. Consumer debt grew by $14.4 billion in August to $4.35 trillion, according to the latest data from the Federal Reserve. That represents a 4% increase. This follows on the heels of a 4.8% increase in […]

READ MORE →

Demand for Silver in Electronics Sector Projected to Surge

The demand for silver is expected to expand along with the continued growth in global connectivity. According to a report released by the Silver Institute, silver demand in electronics and electrical applications is projected to rise by 10% by 2025.

READ MORE →

Comments are closed.

Call Now