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

The World’s Top 10 Gold Producers in 2020

Who produces the world’s gold? Gold production fell again in 2020. According to the World Gold Council, gold production came in at 3,478 tons last year. That compares with mine output of 3,597 tons in 2019.

READ MORE →

Fed Chair Jerome Powell Sticks to Dovish Script During Congressional Testimony

Federal Reserve Chairman Jerome Powell testified before Congress on Tuesday and continued to peddle the “transitory” inflation narrative. Keeping with the dovish tone set after last week’s FOMC meeting, Powell reiterated that the central bank is not going to rush to raise interest rates, and he said the Fed would not hike rates merely in […]

READ MORE →

More Government Debt Means Less Economic Growth

The US government continues to borrow money at a frenetic pace in order to cover its massive spending spree. It runs huge deficits month after month and there is more spending coming down the pike. The national debt is over $28 trillion and it is about to begin surging upward again. But with the exception […]

READ MORE →

Another Inflation Warning: Import-Export Prices Rise Faster Than Expected

In another sign of rapidly accelerating price inflation, import-export prices rose much faster than expected in May. Import prices were up 1.1% month-on-month in May, and the Labor Department revised April’s increase from 0.7% to 0.8%. Projections for May were for a 0.7% increase. The actual number was higher than the high end of estimates.

READ MORE →

Despite Tax Day the Federal Government Runs Another Massive Deficit in May

Typically, the US government runs a budget surplus in the month that tax returns come due. Not this year. Despite a surge in receipts, the federal government ran a $131.95 billion deficit in May, continuing the trend of overspending and ballooning budget shortfalls. The federal budget deficit for fiscal 2021 now stands at $2.06 trillion […]

READ MORE →

Comments are closed.

Call Now