The case for buying gold
It is easy to understand why gold is so precious. It has been this way from the beginning of time. From the dawn of civilization and organized life people recognized gold metal as something of a unique value. Interestingly enough the same happened with different civilizations.
Split apart by vast distances and oceans they still came up with same conclusion and accepted gold metal as an extraordinary value. Pure gold withstood the test of time with flying colors and kept increasing value ever since. It is the only value which cannot be defaulted by the mistakes of others.
Opposite to gold is paper money that could and often does lose all value literally overnight at the stroke of a pen. Unlike pure metal gold which literally lasts forever. It cannot diminish, lose properties or deteriorate in any way. That is an amazing property itself! Gold as a basic metal is the same everywhere in the world. In a few words gold is forever and nothing can change that!
WHO IS BUYING GOLD ?
All gold miners in the world bring up about 2800 tonnes of gold in one year.
About 50% of the world production of gold is used to make jewelry. Notably India and China are two countries with the largest consumption of gold used by goldsmiths to make jewelry.
About 30% of the production is acquired by investors to be held or traded as an investment vehicle or simply held forever as gold is guaranteed to increase value over time.
About 10% of the world production is purchased by central banks to prop their financial systems.
The last 10% is used in industry, medicine and overall technology. Gold is an electrical super conductor.
Also referred to as a fiat money. The value of it is determined by Governments issuing it. The value of paper money fluctuates from very valuable to a value so small that it is actually less than the value of the paper money it is printed on. When people lose confidence in money they do not want to accept it as a means of payment and often its only use is as kindling. This is where precious metals come in as a complete replacement for the paper money.
There is no better monetary value than gold. Pure gold is gold, only one grade, one price. It is the same in Japan or in Chile. It is a dense metal where small pieces are quite heavy and valuable. It is easy to test its purity. It does not corrode or go bad in any way. It is accepted as value anywhere on Earth. Supply is relatively small and actually diminishing since it has been explored for thousands of years. It will never suffer devaluation due to excessive supply. All the gold ever produced can fit into 20 m cube!
By storing physical gold a person preserves and increases their wealth for now and the future. Wars, financial crises, unrests prop the value of gold sky high. The message is unmistakable: buy gold!
DO NOT BUY
Do not mistake stocks of gold producing companies for physical gold! Gold mining companies do well and will become even more valuable in moments of crises. Unfortunately same companies are subject to economical movements, have payroll, equipment, accounting, Government, stock market and many things to worry about. They can lose concessions to land, mines and experience hardships that reduces stock value.
Even worse are ETFs and indexes that have no real value whatsoever in them. They represent financial world inventions how to suck up money from the general public. Values are based on the stock market and can vary widely. The investor can lose everything.
Special DO NOT BUY EVER we would attach to gold paper certificates issued by the banks. It is typical Wall Street invention created to suck up money from investors! Same physical gold or no gold at all is sold to hundreds or thousands of investors as a "sure thing". Only one of hundreds or maybe no one would get actual gold if asked for it. They call it "monetary instrument". Never buy this, ever.
WHEN TROUBLE STRIKES!
Recommended solution is to buy physical gold. It does however represent a logistical problem. Gold holdings have to be securely stored and protected from theft. In moments of financial crisis gold value will skyrocket. The holder will be able to ride the storm by buying living essentials or even capital objects using stored gold. On the flip side he will also be a target if someone suspects that there is a gold on premises.
The fact is food, energy, gas, medications will be very expensive during hyperinflation. One will need buckets of paper money to buy even the smallest essentials. On the other hand normally expensive items like phones, cars, furniture, real estate will cost much less since nobody will be able to afford it.
The dilemma between buying food and life essentials or an latest iPhone is very easy to solve. Food wins every time!