In this time of turmoil, how can people with diligent wealth protect their income?
Benefits of holding money
In times of uncertainty, increasing cash flow and reducing exposure to volatile financial markets clearly makes sense. Some long-term gold holders choose to limit their exposure to global volatility, choosing instead to hedge their wealth with cash and gold securities.
Many turn for money mainly because:
It is variable income
As a useful class, money is flexible which is useful when there an immediate need for cash. From its looks to its appearance, your money and your family know it well. How to spend it and save it. If you are new to gold, you may not easily understand how to buy gold and store it. Holding money requires less interaction with others. Although you may interact with a bank teller, there are other personal interactions that occur when handling cash. Advantages of holding money
New gold buyers may not realize the potential downsides of holding cash instead of gold. From a historical and economic perspective, there are several reasons why gold can be a more efficient asset than holding money:
The money can be withdrawn from your bank account.
Once your money is deposited in the bank, it is no longer legally yours. However when you decide to buy gold, it is legally yours until you decide to sell. The government has a history of extorting money from the banking system. In recent times, the government of Cyprus has frozen money from individual bank accounts to prevent the government from repaying its debts.
These types of events are true for struggling governments, but also for American citizens. The IRS usually seizes the bank accounts of small businesses and people who have deposits of $10,000 or less and have not violated any laws.
Of course, saving money will not make you rich. A central bank can lower the currency overnight just by printing more money. The same cannot be said for gold. Since America left the gold standard in 1971, the dollar’s purchasing power has declined by 85%. A 1971 dollar is worth 15 cents in 2012. On the other hand, the price of gold was flat between 1833 and 1920, and jumped above $1,700 for almost 100 days in 2012.
The price of gold is currently around $ 1,325 an ounce, some analysts predict that it may rise to more than $ 1,600 by the end of the year. Has the US dollar done the same? No. According to statistics, one dollar was equal to 1/20 of an ounce of gold when the Federal Reserve was created in 1913. In 2010, the same dollar was worth only four cents.
Benefits of holding gold
Gold buyersunderstand the value behind precious metals. When it comes to protecting their hard-earned wealth, their money may be better off in gold than paper money, for the following reasons:
Gold can be more effective than money in accumulating wealth.
Interest rates are still low, which means your money in the bank is “worthless.” When you factor in inflation, that money can become worthless.
Gold is recognized as having a history of long-term stability.
Gold has been a global medium of exchange for over 5,000 years. Gold has a track record of over 5,000 years, and can be anything but “uncertain”.
Gold is not fiat money.
Fiat currencies get their profits from government grants. Unlike fiat currency, gold cannot be increased to meet the needs of central banks. Because of its scarcity, gold will always be supported. This precious asset has maintained its purchasing power for a long time, unlike all the fiat currencies that have been issued over the years.