Gold Vs Paper Currency

Buying gold or buying silver or any other precious metal is a clever way to preserve your wealth and purchasing power in comparison to paper currency. This is due to the fact that most currencies have detached themselves from the gold standard in 1971 after President Richard Nixon announced that the US Dollar will be detaching itself from the gold standard (the event was later on referred to the Nixon Shock and lead to the abandonment of the Brentwood Treaty by most major world currencies the last being the Swiss Franc in the year 2009) and embracing the fiat currency system. This action was a long term planning of most governments to debase their currencies. This in turn started a chain reaction that is still on going. The value of a one dollar note and what it is able to purchase fifty years ago is vastly different from what you are able to purchase with the same dollar today. On the other hand gold and silver have shown a different nature altogether with regards to the purchasing power they wield. If you were able to buy a car with ten ounces of gold 50 years ago the probability that you would be able to buy maybe 2 cars with the same amount of gold is not far fetched by any means. As the population of the world rises in leaps and bounds the demand for gold bullion or gold bars has seen a tremendous rise, out pacing the supply of gold from the worlds depleting gold mines. This fact has led to the scarcity of gold to increase and giving it more value. The more people demand to buy gold and the lesser the supply of gold or any other precious metal, the higher the value they will retain. As economical crisis looms every decade over the last 7 decades the value of currency keeps falling and the value of gold, silver and crude oil along with other basic necessities keep rising. This is the key factor behind the inflation trend that shadows almost every single economy that there is in the entire planet. As governments stock pile gold and continue to print money, they are actually increasing the value of gold and reducing the value of their own currency. Buying precious metals is a wealth preserving action that almost every government is racing and competing with each other. For more information, visit the Melbourne Gold Pawnbroker website.