"There's no reason to invest in gold," said the finance editor of a major newspaper interviewing me. "If gold goes up because of inflation, then so does everything else, so why buy it? It's not really a good investment."
She was serious. Yes, she is a finance writer. And yes, it's a newspaper you've heard of.
I was so dumbfounded that I must have sounded like an infant struggling to form its first words when I attempted to counter this inane line of thinking. Tell me you're a deflationist, tell me the Fed will rescue us, tell me foreigners will keep buying our debt - but don't tell me that gold serves no purpose!
I tried to point out the exploding monetary base, the soaring debt, the failing economy - but it was readily apparent her mind was made up. The interview was over and she hung up.
It may sound vengeful, but I'm tempted to keep a list of people whom I could remind someday of their negative comments about gold. I'd put "Betsy" at the top. I probably would chicken out in the end, but right now it's a wonderful reminder of why we're not in a bull market mania yet. Besides, I think the odds are stacked in my favor that she'll someday be buying insanely inflated gold stocks from me. I'll have to thank her then.
But I can address Betsy's misunderstanding now, because part of what she said is correct: gold is not an investment. Gold's primary purpose is to preserve your purchasing power. Whether it be roaring inflation, or dollar debasement, or economic upheaval, or out-of-control government spending, it has been the absolute best form of protection throughout the history of mankind. And I can prove it.
Let's trace what an ounce of gold or silver - true money - has been able to purchase at various periods in history, and how it compares to today.
1979: Gold's average price that year was $306.68. This bought an average-priced full-size bed.
1963: A gallon of gasoline in America sold for 31 cents. This meant that 3 silver dimes could buy a gallon of gasoline. The total weight of silver in 3 silver dimes is .217 of an ounce.
600 AD: In the Middle East, a chicken at the time of Mohammad would cost a family one silver Dirham (3 grams).
Time of Christ: Under the Roman Empire, an ounce of gold purchased a Roman citizen his toga (suit), a leather belt, and a pair of sandals.
400 BC: Some scholars report that during the reign of King Nebuchadnezzar, an ounce of gold bought 350 loaves of bread.
1000 BC: King Solomon was known to have purchased many horses for his army. Historical records show he bought them in Egypt for 150 shekels of silver each. 150 shekels was about 55 troy ounces of silver.
Betsy, gold has characteristics no other matter on earth has...
Gold cannot be:
Gold cannot be destroyed by:
Gold doesn't need:
Gold has no:
Gold as metal is:
Gold as money is:
Gold is internationally accepted, lasts for thousands of years, and best of all, they aren't making any more of it.
Now, Betsy, are you sure there's no reason to buy gold?
As the editors at Casey Research have been saying over and over again: Buy Gold, buy silver, buy sound gold-related investments. Have a look at our newest publication and learn all about these investments in Casey's Gold & Resource Report, Click here now to learn more.
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