Inflation destroys the value of your money. It depreciates your earnings and savings. To keep your purchasing power, you need inflation-proof money: gold.
As long as governments continue to “print” money, prices will continue to rise. For example, since 1913 the general price level in the United States is up 2518%. This means that the US dollar has lost 96% of its value. Inflation drives up prices in general, including the price of gold. The price of gold reveals the flip side of inflation: currency depreciation. Since 1999, the dollar price of gold is up 400%. You need to protect your purchasing power; you need gold.
Governments can’t “print” gold. To increase the gold supply, we must dig it out of the ground; this is costly and risky. Thus the gold supply increases slowly. And such a slow increase can’t cause any notable or continued rise in prices. In the 19th century, when we were using gold as money, the average annual rate of price increases was almost zero. Meaning, the general price level was flat for one hundred years.
In 1965 a new V-8 powered Ford Mustang went for $2,734 or 2418 grams of gold. How much will $2,734 buy you today? Not much. Certainly not a new car.
But how much would 2418 grams of gold buy you today? Over $100,000 worth of goods and services.
Take the iPhone. Priced in dollars, Apple’s latest iPhone 11 Pro costs twice as much as the first iPhone. But when priced in gold, the iPhone 11 Pro is cheaper than the original.
That’s the power of gold.
The world is drowning in debt. Around the globe, governments owe $66 trillion and counting. Add to that $400 trillions of unfunded promises. There’s no way we will ever be able to pay for this. We can’t. To deal with this mountain of debt, governments must resort to “money-printing.” They will inflate away the debts—along with your earnings and savings. Don’t wait for this ticking debt bomb explode. Buy physical gold today.
Like the euros in your wallet, gold doesn’t pay you any dividends or interest. So exchanging your euros for gold is no more an “investment” than exchanging your euros for dollars. But that’s a feature, not a bug. Stocks, bank accounts and treasury bills are risky as businesses, banks, and governments can default. Such paper assets can, therefore, become worthless. Sometimes overnight. Gold is different. Yes, the short term price of gold varies. But since gold can’t default, it can’t become worthless.
–J. P. Morgan
It’s not about expecting a future of “doom and gloom.” It’s not even about the fear of hyperinflation. It’s about preserving your purchasing power.
Do you want to save and invest in worthless Venezuelan Bolivars? Or earn wages and dividends in the soon-to-be worthless Argentine Pesos? Of course not. You’d much rather earn euros or dollars. But why settle for euros or dollars, when gold is superior?
Gold is the best money your euros can buy. Buying gold is an expression of the rational desire for the best things in life. What motive could be more pure, rational, noble, and admirable than that?