Oct 15 2008
Investing In Gold
Before the economy decided to fall out from under us, as many people have been predicting, investing in gold was and still is one of the surest investments for a secure financial future. Unlike mortgages and credit, which is based off of nothing (I mean, you can’t melt a house down to money, after all), precious metals always have always had a value throughout history.
That’s not to say mortgages were never a viable option, but with the subprime debacle, it became obvious to many people very quickly how much a house just plain isn’t worth (if you were an investor, at any rate; if you were a homeowner facing foreclosure, you know damn well how much a house is indeed worth). Much of our economy works like this: I buy your debt – house or credit, it doesn’t matter since you’re supposed to bay it back – and use it as money to buy other things. It’s impossible to understand the US economy unless you understand that debt can be bought and sold. Many people understood this, and saw the problem ahead of time, and so started to invest in precious metals.
Why? Because they have an actual tangible value. Both silver and gold throughout history have been the currency supreme. There is no variable rate, there is no debt. When we get a mortgage, we trade our house for money. When we get precious metals, we trade our money for… money, essentially! It is gold, after all, and we’ve been using it for thousands of years!
Why trust gold and silver or anything else? There’s bad loans, bad credit, etc, all around us. So why trust gold? Besides the history, it’s plain economics. When an economy turns sour (like ours), the price of limited resources must rise, because you can’t buy today’s gold with last years money (remember old timers talking about how cheap bread was? Same concept). So if you invested in gold in 2000, by now the ounce per dollar has upped 800 bucks from 200. That’s a huge turnover.
So investing in gold is as real an opportunity now as it was back then (albeit more expensive), because, to be honest, we probably have a while to go before our economy jumps back up.
Tim Jameson is an author specializing in "how-to" articles in many fields. For his overview on investing for new beginners, Visit How To Invest In Gold!
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