Investing In Gold And Silver For Capital Preservation And Appreciation

No Losses Are Possible From Gold Investment

The detractors of buying gold support their belief in gold bubbles on its price in the 1980's - $850 an ounce - which slumped then, remaining low for more than two decades. Ten years ago, for instance, was less than $300 an ounce. But things can be accounted for historically. Its price was so high back then not only due to inflation, but also due to some significant political developments that seemed to most to announce a global crisis of a sort or another: the USSR's invasion of Afghanistan and the outbreak of the Islamic revolution in Iran. But actually the crisis has waited for other two decades to become global...


The detractors of buying gold support their belief in gold bubbles on its price in the 1980\’s – $850 an ounce – which slumped then, remaining low for more than two decades. Ten years ago, for instance, was less than $300 an ounce. But things can be accounted for historically. Its price was so high back then not only due to inflation, but also due to some significant political developments that seemed to most to announce a global crisis of a sort or another: the USSR\’s invasion of Afghanistan and the outbreak of the Islamic revolution in Iran. But actually the crisis has waited for other two decades to become global…

Another argument used against gold as currency this time is the way gold rates were handled by the US government in the times of the gold standard, when President Roosevelt asked the American citizens to sell their gold to the government for the official rates, which were low, and then the government increased its price by 15 dollars an ounce, which meant a 69% loss for the sellers. Actually, however, this was the means of bringing its price in line with the inflationary prices back then and aiding the country to overcome the great depression.

The citizens had the possibility to buy gold much later, when President Nixon renounced the gold standard. While the gold rates then were market prices and therefore high, did the citizens lose? In the first situation, it was vital to adjust the gold price to inflation, given that the national currency was backed by it. In the second situation, President Nixon proceeded in that way to avoid paying in gold the US debts to foreign governments, allowing the citizens to buy it instead, for prices driven by demand and supply.

Today, though, the situation is by no means similar. The financial crisis became global, banks all over the world going bankrupt due to the credit crisis from the US and having to be rescued by national governments, already deeply indebted due to recession and budget and trade deficits. As such, gold is perceived as the only stable asset, currencies and bonds and stocks alike having proven to be inefficient or even catastrophic.

In this context, gold rates not only cannot plummet but they even can\’t decrease significantly, because gold is the only safe investment and because the supply is limited, whereas the demand is increasing, especially on the part of economies that are growing such as the Indian and the Chinese. Therefore, no one can lose by investing in an asset that is stable by its nature and whose price is likely to constantly increase, driven paradoxically by both recession and economic growth.

Ask specialists how buying gold can aid you in times of economic crisis.

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