Gold and Silver - The Ultimate Currency
Paper money is fast losing the value that it had once attained; with most countries printing more and more paper notes to flush fluidity in their depleting economies, commodities have become quite important. In such a scenario the world is moving to a stage wherein precious metals like Gold and Silver are increasingly becoming greater indicators of real value. Hence these are considered to be the ultimate currency of the modern era.
Preserving Your Purchasing Power
An indicator of financial prosperity is the purchasing power of the people and with the ever increasing inflation rates and highly fluctuating foreign exchange rates, the paper money you have today might not mean a lot in the future. In comparison, looking at the history of investments and economics,Gold and Silver have proved to be a very safe bet.
Moreover, unlike the paper notes, Gold and Silver reserves are quite limited, hence their value is only bound to increase over time as opposed to paper money that can be printed and a big amount today is bound to lose value tomorrow. Therefore if you look towards using these precious metals as a currency that you can invest in, the benefits that you can get over the long term can be immense.
In fact for years, it was only Gold that was considered to be a valuable investment; it is only recently that investors have realisedthe importance of diversifying into Silver and getting a better value for their investments. Silver also has a wide range of applications in industry which enhances the chances of its demand increasing in the future. Also due to its wide applications, the prices of Silver are known to show bigger fluctuations as compared to Gold, hence it is a good option if you are looking to diversify your portfolio and take a percentage of risk to make a quick buck with the fluctuation working in your favour. If you are looking for something that is safe and stable as a currency investment, Gold is better for sure.
Even with the realisationthat Gold and Silver are important, a majority of investments in currency are in US Dollars. This is a big risk as experts believe that the value of the dollar might not remain as high as it is today. In fact it can be as bad as worthless. Hence to preserve your purchasing power in the long run, Gold and Silver will turn out to be the ultimate currency options.
Remember US Dollar is a Fiat Currency!
The US Dollar, which is the currency that is the most used and invested globally, falls into the category of a Fiat currency. It is a type of currency that holds a value only due to the laws and regulations of a government; the currency has no intrinsic face value nor is it necessarily backed by a certain amount of reserves. The US Dollar’s direct convertibility to Gold was ended in the early 1970s by then US President Richard Nixon and since then it has been a Fiat currency. This essentially means that the actual value of a US Dollar might not be as is the projected face value; it is just the promise of the US government to exchange it for a certain value. There can be a scenario wherein the US Dollar weakens drastically and the value of what you hold today as high value currency will be nothing. Since this is a Fiat currency, there is no fundamental value that can be associated with it, hence in the long term it can be a huge step backwards if you are using this as an investment.
Therefore, if you have been thinking that the US Dollar is a universally acceptable ultimate currency and having it as your reserve currency investment is a smart move, you need to think again. Rather than thinking of paper currency as the future, it is better to move on to Gold and Silver. These metals have a great value which is definitely on the rise and is bound to increase further. Moreover, the relative future value of these metals in most cases is expected to be as high as it is today or even higher due to the limited resources available and the high prevailing demand.
Gold & Silver Bullions and the Re-occurrence of Reserve Currencies
Bullion is the term used for a precisely extracted and weighed piece of Gold or Silver that can be traded in. You can purchase these bullions for the prevalent prices of these metals plus a fraction added for the refining process. These bullions are known to be of a specified purity and weight and can be exchanged in the future for a value of the bullions at that point of time. With the instability of various Fiat currencies and inability of US Dollars to give a complete insurance to investors as the ultimate currency, Gold & Silver bullions seem to be a much more viable and trustworthy option.
The demand for Bullions has gone real high especially after the current Euro zone fiasco. A currency like Euro that was considered to be something that a lot of people looked forward to might be on the verge of being devalued and extinct from the market. There is a fear among the investors, and this fear is making the Bullions all the more attractive.
With the currencies being controlled by the respective governments and the patterns not going as per the fundamentals of economics, there are great chances that a lot of currencies may get devalued or be inflated. In order to avoid such a situation, many of the leading economists have also recommended the re-occurrence of the reserve currency mode wherein the value of the currency can be as per the amount of Gold or Silver or other precious metal reserves.
There are a number of factors that point towards Gold and Silver playing increasingly significant roles in our society. These two precious metals can definitely be great substances for jewellery but they can also play the role of being the ultimate currency!