Stephanie

Why Should I Own Gold?

Jacob, there is a reason those of us own gold/silver. Unlike paper money, which can be printed up/entered into the computer on a whim, gold has a much more stable value. I say this because you cannot print up or enter into a computer account physical gold in that same manner. Expanding the gold supply is hard, dirty, dangerous work. People have gotten hurt, even died creating the money supply in mines, shipping channels, and refining plants. It takes time to make an ounce of gold or silver. On top of that, since nearly all the gold ever mined in the last 7,000 years remains aboveground, the annual addition to the gold supply only increases it by a small fraction, helping to keep the gold supply stable in terms of value, and that stable feature grows into the future as the gold supply grows larger.

You need to understand that the piece of paper that is a $100 bill cost only a few cents to make, no more than the $1 bill. That is what fiat means. Backed by nothing other than the faith of the US government and unconstitutional tender laws that say you can redeem a tattered dollar bill with another one. There is nothing in fiat currency to keep us honest, to keep the people close to the vest from taking advantage of inflation and working it to the common people's disadvantage. We cannot resist the temptation. It is part of human nature. History is littered with stories like this. The Ancient Roman empire? Archaeologists in the last few years finally confirmed that the ancient government did indeed debase the currency by increasing the amount of base metals in what were originally gold and silver coins, and finally going to all-base-metal coins, even clipping the gold coins. The Chinese experiment in paper money? They played with it for several centuries, having to reform it several times because of inflation. The US Continental Dollar? "Not worth a continental" came out of the Revolutionary period. The Union greenbacks? Used to fund the Civil War because gold couldn't be made fast enough to fund the war. I just checked the Bureau of Labor Statistics' web site that has an inflation calculator that shows that the dollar in 1913 had the same buying power as $22.22 today does. www.bls.gov/data/infla... - that is over 95%!

You have to understand that inflation is a form of stealth theft. The people that get first dibs on money to start and run businesses, or even do nothing by virtue of connections get to buy stuff at lower prices than the rest of us do. Our wages now do not keep up with inflation.

Being on a gold/silver standard taught us how to live within our means. If we wanted our store of value to increase, we had to get out there and work for it. There was little in the way of investing the money in stocks or artificial financial instruments and getting rich off them. These financial instruments are a lazy person's perfect dream of not having to work. We can't have this. Someone has to pick up the garbage, fix electrical faults, fix blown engines, fix collapsed bridges, do complicated bone surgeries, keep records of customers in order to formulate SOME kind of financial budgeting for the following fiscal year, etc. You can't have everyone rich and not doing anything or at the least, playing money master.

All these reasons and more is exactly why we had a silver standard to start with (read the coinage Act of 1792 - according to this thing, a lot of people today are eligible for the death penalty). The founding fathers had experience with exactly what we are dealing with today.