Can Gold Overcome the Financial Crisis?

Gold is a great tool for getting through a financial crisis. Some examples of when gold is favorable is when there is instability in the stock market, inflation/hyperinflation, global debt crisis, banking problems, and over printing of money/collapse of the dollar. For over 5,000 years people have found gold to be very valuable. Through the advancement of technology, civilization plunging, and money coming and going, gold has held its value.  To this day gold is considered the ultimate store of value.  Case in point, look at the worlds 2nd largest country by population, India, there the dream is to own gold, even more than a home.

Here is the US, one of the big reasons people purchase gold is to expand their portfolio and prevent against the down falls in paper assets. An example of when people took advantage of investing in gold is when several large banks fell apart in 2008. The value of gold increased 27% going for $725 per ounce to $925 per ounce. When the stock market collapsed in 1987 gold went to its highest value since 1983 going for $500 per ounce.

One of the main protections from inflation is gold bullion. One ounce of gold in 1910 could purchase around 222 loaves of bread and today it could purchase around 350 loaves of bread. Another way of looking at this is 95% of the dollars buying value as has been lost. In 1910 $100 would have been worth roughly 5oz of gold; today 5oz of gold would be worth around $8,500. To illustrate the dollars loss in another way, if you had $100 in 1910, today it would be worth $5 but that same amount it gold would be $8,500. That is quite a huge difference.

Through all the financial and global disasters over the years gold has been a safe landing place. Gold will is widely held by many to always be a safe landing place for your dollars as we continue in this global financial crisis.

Gold has been increasing in value every year for the past 11 years. It has risen an average of 17.54% each year building a sold foundation.  During financial times like these, with the only answer seemingly to be more money printing, doesn’t it just make sense to own gold?