Why Is Gold A Safe Investment During Recession |
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| By: Katherine Dunn | ||||
The recession hit us with a massive rise of inflation. This made currency, particularly the pound sterling, depreciate in value. Gold does not depreciate in value (and actually increases) with inflation - in fact, gold is priced throughout the world in dollars, so even if the pound is as weak as ever gold will still move up in value, buying, selling and making money through investing in gold markets. When currency and paper money fails gold will not. A hundred years ago, for example, if you had the choice to keep either 50 in currency or the exact same amount in gold, which would you decide to keep? 50 in 1910 will buy you a great business suit, one of the best around. However, that 50 today would not buy a world-class business suit, and instead get you a charity donated suit at best, because the currency has depreciated in value. The gold you owned will buy you a business suit 100 years ago and probably the same good suit 100 years later - gold appreciates, unlike your currency. Inflation actually causes gold to appreciate. Holding onto gold through economic crisis is a way of ensuring your wealth is safe and will not depreciate or lose value, like currency will. It is a complete safety net should the economy get worse - in times like the recession, gold can go further than any amount in your bank. We also need to look at the World Banks and Federal Reserves. They still top-up their gold assets and still keep solid gold deposits safely tucked away - gold must be a good investments or the banks would not bother to keep it. The reason is obvious - when the strain of the recession turns out an economy that can't cope gold will still hold a person or state's wealth throughout the downturn, even if the economy comes to a complete standstill. |
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| Article Source: http://yourfinance.co.za | ||||
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