Why Should I Own Gold?

By Author: Micel Clark
Total Articles: 3
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I always get the question, "why should I own gold?" and while there are many reasons that you will hear from various people, most of the answers have something to do with fear. Whether it is fear of the stock market going down, fear of systemic risk in the markets, geo political fears, fears of inflation, fear of the falling dollar, etc, etc. To an extent, all these reasons contribute to why gold can be a valuable asset for your portfolio, but I'm going to tell you the main reason why you should own gold, and that is simply that it is the ultimate alternate currency.

We have fiat currencies such as the dollar, the Euro, the yen, the pound etc., and all these currencies that are made from paper are easily able to be reproduced, simply by just printing more, backed up by absolutely nothing. Right now, the developed nations of the world are all struggling, and as a result of this horrific downturn that we are experiencing, these governments are spending more money than they ever have while falling in debt more so than ever before. To make things worse, central banks across the globe are printing massive amounts of ...
... money and it is only logical to believe that the value of their currencies are going to be worth less, which is why you are seeing money move into precious metals. With precious metals, you can't print more of it, unlike the dollar or Euro, so when the value of these currencies becomes debased, people sell those currencies and some of that filters into gold, therefore increasing its value.

Gold has always preserved its value; ever since the Federal Reserve was created back in 1913 the value of the dollar had plummeted by 98% and just in the last decade again by over 30%. One has to think about this in a rational way; would I rather keep my holdings in dollars, knowing that it has a proven track record of losing value, or should I diversify some of my funds into gold that has always increased and at the very least preserved its value?

We are living in some turbulent times folks, and governments and central banks are doing everything they can to support their economies, and that has a price. The price is a weaker dollar and currency, and all this money printing and deficit spending is going to lead to very high inflation down the road. Keeping your money in cash will be a very bad idea; it is time to diversify into precious metals, and prices will go much much higher than where they are today.

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