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 latest gold market analysis – click here for a free subscription to his exclusive monthly Gold Videocast.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!

[Total: 15    Average: 4.3/5]

Related Posts

Is Janet Yellen Playing a Game of Monetary Chicken?

The Federal Reserve took a hawkish stance at its latest Open Market Committee meeting, announcing plans to begin unwinding its balance sheet next month. Fed chair Janet Yellen also indicated she plans to raise interest rates one more time this year. Here’s the question: Is this a viable path forward, or is the central bank […]

READ MORE →

US Threat to Cut China Off from the International Dollar May Be Empty

china flagEarlier this month, the US threatened to lock China out of the dollar system if it doesn’t follow UN sanctions on North Korea. Treasury Secretary Steven Mnuchin threatened this economic nuclear option during a conference broadcast on CNBC. If China doesn’t follow these sanctions, we will put additional sanctions on them and prevent them from accessing the […]

READ MORE →

Toys R Us Bankruptcy: It’s Not All About Amazon

Toys R Us filed for bankruptcy earlier this week, a wicked head-shot to a retail sector that’s been reeling for months. The TRU filing ranks as the second-largest US retail bankruptcy ever, according to S&P Global Market Intelligence. Toys R Us had $6.6 billion in assets at the time of filing. Only Kmart was bigger. It […]

READ MORE →

Cryptocurrency Website Says Now Is a Good Time for Gold

Even some of the biggest supporters of Bitcoin and other cryptocurrencies recognize the stability of gold. Last week was a bad week for Bitcoin. It’s price dropped significantly in the wake of a Chinese government crackdown on cryptocurrency exchanges in the country. Bitcoin’s price has recovered a bit this week, but a recent article published by […]

READ MORE →

Russia and China’s Golden Plan to Shift Economic Power East

Russia and China seem to be betting their monetary futures on gold. Their long-term maneuverings could seriously undermine the dominance of the US dollar and shift the world’s economic center of power from West to East. Russia and China buy more gold than any other countries in the world, with Russia leading the way. Over the […]

READ MORE →

Comments are closed.

close

Enjoy this blog? Please spread the word :)

Free Newsletter & Notification of Special Deals
RSS Feed
LINKEDIN
YouTube Channel
YouTube Channel
Google+
Google+
https://schiffgold.com/key-gold-news/five-reasons-buy-gold
Call Now