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

What a China-Taiwan Conflict Could Mean for Semiconductors, Gold

American-made weapons will soon be bound for Taiwan, American lawmakers are telling Taiwanese President Lai Ching-te, sending shockwaves of uncertainty through electronics and metals markets this week.

READ MORE →

Which Central Banks Are Selling Gold?

Central bank gold buying has been a significant factor in the yellow metal’s spectacular run-up to new record highs. But with its recent small correction downward, it’s a good time to look at which central banks are selling — and why.

READ MORE →

Death of Iranian President Carries Gold, Copper to New Record Highs

Amid ongoing tension in the Middle East, Iranian President Ebrahim Raisi and the foreign minister have been confirmed dead Monday after a helicopter crash. The officials’ shocking demise casts additional investor doubt on a region already plagued by economic upheaval, with supply chain uncertainties fueling record-high metal prices this week.

READ MORE →

South Korea’s New Way to Pursue Safety

While gold bullion is most often sold in bar or 1oz coin form, the Korean retail market is benefitting from gold’s latest success with a very atypical marketing strategy. It has been traditionally thought that investors prefer larger increments of bullion because they simplify calculations and have a lower transaction cost than buying the same amount of gold in smaller increments. Demand for traditional bars and coins in South […]

READ MORE →

What Will CBDCs Mean for Gold?

With the eventual introduction of central bank digital currency (CBDCs) now seemingly inevitable, there are a lot of directions central banks could take with their digital currency projects that would have dramatic implications for the price of gold.

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