Gold: A Solid Investment

Since gold cannot be made or printed at the whim of greedy politicos, it can't be devalued as quickly as the paper money that is printed whenever need arises.

Let's be clear about one thing. The currency disaster is coming very soon. Instead of sitting around and watching it from a distance as it is unfolding, guard yourself against and benefit from an economical upheaval that might fundamentally render your paper money worthless.

We have seen a prelude of this type of problem not too long ago. In early 2006 a foreign exchange crisis started an avalanche of selling in overseas markets from Brazil to Indonesia. The Icelandic krona lost almost one tenth of its value within just forty eight hours, dragging down Icelandic shares and bonds with it and subsequently extending to Brazil, Mexico, Poland and Turkey.

Preface to this event was the crash of Asian currencies of 1997, which sent local stock markets into a free fall.  Financial institutions, insurance firms, even real estate and debt instruments also fled the scene. The only true sensible option nonetheless remaining was gold.

In the event of another such decline in currency values, gold may possibly be worth at least 10 times its current value.

How can this prediction be credible?  Put it this way: because gold cannot be manufactured or printed in a hurry, it cannot be devalued as fast as the other paper currencies which could be printed on demand.

Any time when paper money is backed by gold, $1 in paper must be backed by a single dollar's really worth of gold. At the time when paper currencies aren't any longer backed by gold, governments can print them just as much and as fast as wanted. Obviously, most governments in the modern world have taken their currencies away from the gold backing and that's why paper money has no intrinsic worth.

As a result, most major trading institutions only speculate short term between those currencies and their associated local values, such as stocks or bonds, and then they convert their profit into gold. This is where some major financialfirms specialize in global trading and diversification. They made money in both currency trading, and U.S. small stocks that recently acquired dual listings with the European exchange. They then convert half of their profit every month into gold on behalf of their clients.