I was trying to explain it for you, but I was going in circles.......this article does it clearer and more concisely than I can.<br />
<br />
To help combat the Great Depression. Faced with mounting unemployment and spiraling deflation in the early 1930s, the U.S. government found it could do little to stimulate the economy. To deter people from cashing in deposits and depleting the gold supply, the U.S. and other governments had to keep interest rates high, but that made it too expensive for people and businesses to borrow. So in 1933, President Franklin D. Roosevelt cut the dollar’s ties with gold, allowing the government to pump money into the economy and lower interest rates. “Most economists now agree 90 percent of the reason why the U.S. got out of the Great Depression was the break with gold,” said Liaquat Ahamed, author of the book Lords of Finance. The U.S. continued to allow foreign governments to exchange dollars for gold until 1971, when President Richard Nixon abruptly ended the practice to stop dollar-flush foreigners from sapping U.S. gold reserves.<br />
<br />
http://www.mentalfloss.com/article/12715/why-did-us-abandon-gold-standard

Best Answer

Thanks I read that article. It confirms what I already suspected from other readings such as "THE ZURICH AXIOMS" by Max Gunther, published by Unwin Paperbacks in about 1985 originally and it's been published many times since then. The long and short of it I think is that governments like 'paper' money because they can easily pay their debts by just printing more, but each time they do they diminish the VALUE of the currency and their citizens find it harder to live. Just look at the price of GOLD for example. It is always available on a free market but no one can regulate the price. When is the last time you saw the price of GOLD come down? The only way it can come down is as a short term adjustment to some temporary economic ripple such as at the very peak of the Australian Mining boom which obviously can not last very long. Otherwise the long term direction of the price of gold can only be up. It looks like a pretty safe bet to me, LONG TERM.

Best Answer

It is a safe bet long term as long as you don't need the money. It does not pay interest and when you buy it, you have to pay a premium over the spot price.
But, it has been a better investment that the stock market over the last few years.
Unfortunately the few ounces I bought at 350 and ounce were sold at 825 an ounce two years ago. It is a safe bet to own, along with silver.

Best Answer

Everybody should have some in their portfolio.

Best Answer

I'm thinking of buying some from a reputable bullion dealer in negotiable quantities like 2 oz bars or coins. It is a bit more expensive that way but has the advantage that if you need some cash you can trade a bit and leave the bulk of your investment intact. Silver is good too but it has some industrial uses (electronics, photography) that make the price a bit volatile. Gold has only three uses, dentistry, jewelery and investment. As the traders where I live say, "It's Gods money". And usually, when the dollar is weak the price of gold goes UP. And on the odd rare occasion when inflation is low (that is VERY odd and VERY rare I know) gold does not lie, the price will come down but usually not much and not for long. I would not mind showing a loss on paper if I bought when the dollar was weak and sold when it got stronger. At least it would attract no capital gains tax.

Best Answer
1 More Response

Related Questions