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


Related Posts

Romania a Step Closer to Repatriating Its Gold Reserves

gold barsRomania moved another step closer to bringing all of its gold home this week. According to Romanian news outlets, the Chamber of Deputies Budget and Finance Committee released a favorable report on legislation that would require the country’s central bank to repatriate its gold and hold it within the borders of the country. Related

READ MORE →

China’s Keynesian Experiment

While President Trump nags the Federal Reserve to reinstitute Obama-era monetary stimulus, China has already taken off down that path. And it actually has some people in the mainstream concerned. According to a Reuters report, the Organisation for Economic Cooperation and Development (OECD) is warning that while Chinese government stimulus may boost the country’s economy […]

READ MORE →

European ETF Gold Holdings Hit Record Level

The amount of gold held by Europe-based ETFs hit a record high in the first quarter of 2019, according to a report by the World Gold Council. European funds now hold 1,121.4 tons of gold. The WGC pinpoints three primary drivers of European gold investment. Related

READ MORE →

Production Plunges for World’s Largest Silver Miner in Q1

The world’s largest primary silver producer reported a plunge in production in the first quarter of the year, continuing a global trend of declining silver output. Total silver production at Fresnillo PLC dropped by 15% in Q1. The company blamed falling mine output on lower ore grades and reduced volume of processed ore. Related

READ MORE →

Silver Demand Hit 3-Year High in 2018 as Supply Fell

Silver demand was up 4% and hit a three-year high in 2018, according to the 2019 World Silver Survey released by the Silver Institute this week. Physical demand for silver came in at over 1 billion ounces last year. Meanwhile, silver mine production fell for the third straight year, dropping 2% in 2018 to 855.7 […]

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