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

Want Stable Purchasing Power? Buy Gold and Silver

  by    0   0

Gold represents stability.

Buying gold makes a lot of sense as historically, gold holds its value. It also maintains a relatively constant level of purchasing power, especially when compared to the US dollar.

In 1976, University of California Professor Roy Jastram completed a long-term analysis of gold’s purchasing power stretching all the way back to 1560 and published his finding in The Golden Constant: The English and American Experience, 1560-1976. He found gold’s purchasing power remained remarkably stable over that period, as reported by the London Telegraph.

PF-gold-price_1494468c

Professor Jastram found that, over a period of more than 400 years, gold had proved an effective store of value and an ounce would usually buy a good, but not luxurious, outfit of clothes.”

Jill Leyland updated the book in 2009. Of course, there have been peaks and valleys, most pronounced after the US went off the gold standard. We saw two significant spikes in purchasing power since 1971, along with some dips. But overall, the precious metal has maintained a remarkably stable level of purchasing power over time.

This becomes particularly evident when placed in context with the purchasing power of the US dollar. The greenback has done nothing but drop since the creation of the Federal Reserve.

Since 1913, the purchasing power of $1 has dropped to less than 5 cents, a nearly 96% decrease. We illustrated just how bad currency debasement has gotten when we pointed out that plastic pennies now cost more than the real thing.

purchasing-power-of-dollar-1913-2011

Buying silver also makes a lot of sense. Why? because not only has gold retained its purchasing power, silver has as well.

As we recently reported, you can see the stability of silver’s purchasing power in the context of the push for the minimum $15 per hour wage. In 1964, the minimum wage stood at $1.25. In other words, a minimum wage worker earned five silver quarters for every hour worked. Today, you can’t even buy a cup of coffee with five quarters. But the melt-value of those five silver quarters stands close to $15.

This vividly illustrates currency debasement. In terms of purchasing power, the value of the silver remains relatively stable, but the value of a dollar shrinks. The long-term rise in the price of silver reflects this reality.

Historically, owning physical gold and silver provides a means to maintain your purchasing power in the face of central planning and currency debasement.

WhyBuyGoldNowBanner.070815.590

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 more about physical gold and silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!


Related Posts

Gold Mine Production Up Modestly in 2022 But Remains Below Pre-Pandemic Peak

Gold mine production was up modestly in 2022 as mining operations normalized post-pandemic. But mine output still hasn’t returned to the peak we saw in 2018, boosting speculation that we have possibly reached “peak gold.”

READ MORE →

Why Have So Many People Dropped Out of the Labor Market?

Why is there a labor shortage in the US? In a nutshell, a lot of people have simply dropped out of the labor market. They’re not working. But why?

READ MORE →

Gold Demand Hit 11-Year High in 2022

Gold demand grew by 18% to 4,741 tons in 2022, the highest demand in 11 years, according to data compiled by the World Gold Council. Massive central bank purchases coupled with strong retail investor buying and slowing outflows from ETFs drove overall demand higher.

READ MORE →

Petrodollar on Shaky Ground; Saudi Arabia Willing to Discuss Selling Oil in Other Currencies

In a recent interview, Saudi Arabia Finance Minister Mohammed Al-Jadaan said the country is open to discussing trade in currencies other than the US dollar. This could mark the beginning of the end of petrodollar exclusivity. That would be a huge blow to dollar dominance.

READ MORE →

Why Are Central Banks Buying Gold?

As we’ve reported central banks globally have been piling in gold. The question is why?

READ MORE →

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Call Now