During the Roman Empire, an ounce of gold purchased a well-off Roman man his toga, leather belt and a pair of sandals. Today, one ounce of gold will still buy a man a suit, a leather belt and a pair of shoes.
Throughout history, paper currencies have come and gone. During their short lives, paper currencies inflate and deflate wildly in value with circumstances and man’s folly. But gold is not a thing of man. It has real, intrinsic and enduring value.
From 1834 to 1862, U.S. currency was backed by gold. This was known as the “gold standard." The fact that currency was back by real gold steadied the value of the dollar. Each bill was a certificate that could be exchanged for real gold.
During the Civil War, politicians abandoned the gold standard to print extra money to pay federal bills. The price of gold increased significantly. Congress returned to backing U.S. currency with gold (and silver) after the Civil War.
Then, in 1971, President Richard Nixon moved away the gold standard permanently and made the U.S. dollar a fiat currency – only paper and numbers, not backed by gold, other metals or anything of real value.
Many believe that the Federal Reserve and U.S. Treasury control and manipulate the money supply, causing constant inflation and decreasing the dollar’s purchasing power. U.S. dollars saved today will not buy the same amount of goods and services in the future.
Since 1971, the value of gold has risen when priced against the U.S. dollar.
What does this really mean? Unlike stocks, which increase in price due to earnings growth, gold mainly increases in price due to the devaluation of our money.
When U.S. politicians fail to balance the U.S. budget, the Federal Reserve prints money to pay government bills. These new dollars tend to boost the price of gold.
Precious metals are MONEY. And while most investors value gold as an inflation hedge, gold holds value because it is a limited (scarce) resource. Base metals cannot be alchemized into gold, nor can gold be multiplied by a printing press. It must be mined out of the earth.
Further, the trade supply of gold shrinks as gold is used for jewelry, a traditional form of savings in many countries. Unless the United States balances its budget, reduces its deficit, and lowers its national debt, we believe gold will continue to rise in price and remain an important part of every American’s portfolio, including for some investors the rolling over of an existing IRA, 401(k) or other retirement plan into a gold IRA. Use the Augusta™ Gold IRA to defer income taxes AND get all of its unique advantages.
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