You Cannot Count On Banks
First and foremost gold does not disappear when the banks fail. Although cash is insured by the government and gold is not do you want you assets to inflate or deflate? If the banks were to collapse tomorrow your cash would be all gone or worth less at least. Gold, on the other hand, has what is called an “inflation hedge” which means physical gold cannot be effected by deflation. The simple idea that precious metals have a physical value that increases over time is a statement that should stick in your brain as you try to decide where to put your cash. Sure, cash is much easier to hold onto and you can walk into any store with your $100 and you can buy $100 worth of goods. But if you buy $100 worth of gold, you could possibly get your money back in a few years doubled or even tripled.
What Does History Have To Say?
The video below may be a few years outdated but historically it gives you a good idea of how gold and cash currencies coincide with one another.
Gold Is Somewhat Rare
That statement should be taken with a grain of salt. I know there are big debates on the topic but here’s this. Gold Fields Minerals Services (GFMS) have estimated that only about 150,000 tons of gold has ever been mined. At a gold price of $370 per oz, this values the total world gold stock at $1.7 trillion. Relative to the $1.3 trillion in cash in the US alone and considering the fact that cash can be multiplied over and over again I think it is safe to say, Gold has some sort of scarcity value.
Gold Is More Secure & Safe
When you are using cash there is no identification number so everybody knows it’s yours. You could find a dollar in the sewer and keep it. Everyone knows this. This is not the case for gold however. Investors that have gold accounts have exact identification numbers for each and every bar. Your gold can even be insured.
Gold is a trusted currency. It has been around and accepted for thousands of years and will be for as long as time allows. Gold is indestructible. It is liquid and it is secure. Do you think gold is better than cash? What are your opinions?