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

Singapore Adds Gold to Reserves for the First Time in Over 2 Decades

Singapore expanded its gold reserves by about 20% earlier this year, joining a growing number of countries increasing their investment in the yellow metal.

READ MORE →

Silver Demand Expected to Exceed 1 Billion Ounces in 2021

Every key area of silver demand is forecast to rise in 2021, according to the Silver Institute’s Interim Silver Market Review. The institute projects silver demand will come in at 1.029 billion ounces this year. That would mark the first year demand has exceeded 1 billion ounces since 2015.

READ MORE →

Jerome Powell 2.0

President Joe Biden has tapped Jerome Powell to serve a second term as chairman of the Federal Reserve. Biden said Powell’s “steady leadership” helped calm markets as governments shut down the economy due to coronavirus, and he expressed confidence in Powell’s future leadership. “I believe Jay is the right person to see us through,” Biden […]

READ MORE →

The Fed Pulled Off a Masterful Manipulation of the Junk Bond Market

The Federal Reserve pulled off a magnificent manipulation of the junk bond market, facilitated a massive wealth transfer from savers to speculators, pocketed millions of dollars, and then washed its hands of the matter. In March 2020, as governments shut down the economy for coronavirus, the Fed slashed interest rates and launched a massive quantitative […]

READ MORE →

Poland Plans to Add Another 100 Tons of Gold to Its Reserves

During a recent interview, Bank of Poland President Adam Glapiński said the central bank plans to add 100 tons of gold to its reserves in 2022. In 2018, the National Bank of Poland began aggressively adding gold to its reserves. Through the first half of 2019, the Polish central bank added more than 100 tons of […]

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