GOLD IS MONEY

GOLD IS MONEY

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A lot of people these days do not understand the concept of money and they usually call currency money. But currencies like euros, pounds or dollars are not a store of value over a long period of time thus cannot be called money.

Since the establishment of Federal Reserve in US in 1913 the dollar has depreciated 95%. Ever since that time the FED kept diluting the purchasing power of the currency by counterfeiting more and more of it. This procedure is a legal counterfeit but counterfeit nonetheless. That is what happens when governments establish their central banks and are granted territorial monopoly for money.

On the other hand gold has always been the biggest enemy of state. It has won every battle in the monetary history over fiat currency. Take for example the 1971 when US left the gold standard. Before that they committed a fraud printing more dollars than they had gold and when Charles de Gaulle started the world run on US central bank Nixon took US off the gold standard. From the fixed 35$ dollars per ounce its price was allowed to readjust itself on the free market. And it did. It went from 35$ in 1971 to 850$ in 1980. And even though Jim Dines warned about it in 60s he was fired from his job on Wall Street. 10 years later everybody who listened to him became a millionaire as the gold went up 24 times in its price.

So the average chance of survival of fiat currency is zero. It has always failed. First paper currency introduced by the Chinese in the XIV century ended with hyperinflation. Believe it or not dollar will fail, too maybe even in this decade. Yes we are heading towards a currency crisis and it is going to be of epic proportion.

But where there is a crisis there is also an opportunity. Gold usually works as a hedge against a monetary collapse when it readjusts its value in terms of the inflated money supply. So this way we are heading towards the biggest wealth transfer in recorded human history. Take advantage of it while precious metals are still silly cheap.

In not so distant future gold will prove to be the best form of money ever created. So do not be foolish trusting government. Politicians do not have your good in their mind. Entrepreneurs do. And remember, making no bet you make a bet, too.

Autor:
Tomasz Kaszura
University of Wolverhampton

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