Friday, October 7, 2011

Gold and silver, unlike paper money, never die

From: GoldMoney - Gold Research

Moments like these can be tough. Gold is down, and silver is too. Call it a “correction,” ”liquidation,” a “flight” – call it whatever you prefer. In short, it is something the precious metal enthusiast hates to see. (Unless, that is, one is looking for a buying opportunity).

But what does it matter, really? Gold and silver are not short-term investments. They are not get-rich-quick schemes – quite the opposite in fact. They are long-term hedges against both inflation and currency debasement. For centuries, gold and silver have been the ultimate store of value, and the truest forms of money. Simply put, they are worth their weight, and will bounce back strongly from their recent price setbacks.

The reason why is because the long-term outlook for gold (and silver) is incredibly bullish. Our current financial and economic systems are both unsustainable and unsolvable. They are unsustainable because fiat-paper currency itself – the present monetary standard for the entire world – is a system based on faith and, once that faith is lost, so goes the value of that fiat-paper currency. They are unsolvable because our governments – especially in the United States and in Europe – refuse to accept the only two possibilities which remain: they can either a) admit that their fiat-paper currency system is solely based on faith (and then watch it all fall apart) or b) fail to admit that there is a problem with fiat-paper currency and continue to spend billions upon billions upon trillions (and then watch it fall apart). In either case, the end is the same: a worthless piece of paper.

Option “b” seems to be the route our governments and central banks have chosen to take. For instance, in the United States, financial programmes like quantitative easing are just fancy names for plain and simple money printing, with the same policy also evident in Europe and Japan. In fact, it soon becomes evident in any country or region with a fiat currency that runs into serious debt issues.

But for those who hold gold and silver, they need not worry about having faith or confidence. Why?

Because they have something real. They have something which has been money for over 6,000 years. They have something which is virtually indestructible. They have something which can be easily divided and then those divisions exchanged for a variety of other real and tangible assets. They have something which nearly all persons, since Aristotle to President de Gaulle, have deemed valuable and true.

They have gold. And in the long run, that’s counted for an awful lot.

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