Gold Is currency

All through the ages gold has represented wealth. The more gold you owned, the richer you were. This is still true today, however owning physical gold has been replaced by the US dollar, which is supposed to represent gold.

When countries began creating their own currencies, all of the money printed was backed up by physical gold the country had in their gold reserve. The amount of money the country could print was set by the “gold standard.” Which means that all of the world currencies were exchanged at a rate fixed to the price of gold. All currencies were compared to the value of physical gold ira rollover.
This changed when the US dollar became a proxy for gold. The US dollar was like a receipt for the gold the government had stashed away in a secure vault – like Fort Knox. Once the gold was no longer used as a standard of value, the dollar had nothing to back it up. The belief was that the government would always maintain the value of the currency with taxes generated and other values. But, instead more money was printed than value raised, putting the government deeper and deeper in debt.

What does this have to do with investing in gold? Gold should be treated like a currency, and not like an industrial metal. As with all currencies, what you can buy with gold will vary from one day to the next. Just like with the Euro, the exchange rates change almost daily. This makes gold a somewhat risky investment.

The availability of gold is also something to consider. New mines are opening up, but getting the gold out of the ground, cleaning it up and getting it ready for sale takes time. Countries can print new currencies at will. Of course, every time they do they increase their debt because they have nothing to back up their currencies, but they print new money anyway.