It’s widely regarded in the field of the economy that the most complex and the most debated concept is the theory of money. What is money? We all use it, we all transact in it, and yet, the definition doesn’t come to mind. Since the dollar is money, is the euro money too? What makes them different, and how can one be worth more than the other?
Researching the role of money is complex, and the question of what it represents has been popular ever since it was created. Ancient people wondered whether the coins they used were a gift from the gods, an invention of an intelligent king, or an agreement between two cultures that resulted in the continuous enactment of the forces that currencies bring with them. Click on this link to read more.
Defining the problem of money is still popular, and there are plenty of interesting ways to define it. One of the best explanations is by Galbraith, who believes money is equally important to the people who have it and those who don’t have it because both have important reasons to understand it.
This concept is as old as humanity, and there have been many attempts to amass as much profit as possible, which is one part of human nature. Karl Marx, who lived in the time when the gold standard was enacted, thinks of them as a means that functions as a measure of value. Other economists think that currencies are nothing but a means to pay for transactions, which the government has given the power to. There is truth in both statements.
Why is gold the ultimate resource?
For thousands of years, we’ve used gold as a medium of exchange between each other. It’s the easiest way to explain the concept of money, and it’s also the best one. Paper currencies were only developed to mimic the function of this yellow metal, and ever since the gold standard was abolished, we’ve experienced nothing but inflation. Follow this page for more info https://www.mining.com/gold-price-edges-higher-on-fears-of-economic-slowdown-following-sanctions/.
These past few months show that vividly. Gold covers all concepts perfectly. It serves as a measure of value, it’s also a medium of exchange, and it’s also a store of value. Something that’s highly valuable will be worth a larger amount of gold compared to other items.
Additionally, you can create coins that can be used as transactions. And finally, you can keep it safe and stored because it’s going to be worth more in the future. We can’t say the same thing about the dollar.
Why should you save precious metals?
One of the main things you can do with money is saved them from buying something in the future. A few thousand years ago, instead of keeping a hundred cows if you wanted to buy a house, you could just keep a single chest of silver and gold.
That makes it much easier when it comes to storage costs. Fast forward to today, and you’ll notice that almost no one is saving money. There’s no point in it because the dollar is losing its buying power each month. At the moment, the currency that gets used almost on a daily basis is only backed by the words of the government.
There’s also an invisible link between the price of the dollar and the prices of refined and unrefined oil, gas, and coal. Since the United States has a large majority of these resources, they’re considered the richest country on the planet.
When the prices of oil go up, so does the buying power of the dollar. Everything would be fine and dandy if there was a limited amount of paper currencies flowing in the market that were carefully released whenever the economy allows it. The US Gold Bureau would be much better than the Fed. Especially in times like now, when there’s a crisis at our hands.
However, the Federal Reserve has been making a profit for the last 50 years because they’ve been printing millions of banknotes and using them to enrich the government, which has increased spending every year. These actions have led the world into global inflation, where paychecks are stagnating while living costs are increasing.
That’s not a position that anyone wanted to be in, but central banks eventually created. The year 2008 was a wake-up call for a lot of people to stop trusting the actions of these governing bodies and for them to realize their mistakes. But it seems like the lesson has not been learned.
The only thing that remains true in the current state of the economy is that the prices of silver and gold are going to increase while the buying power of paper currencies starts to decrease. We’ve already noticed that with a 7.5 percent monthly inflation rate, the chasm between these two monetary tools will be even bigger.
Why are gold companies the best investments at the moment?
There’s a limited supply of gold in the world. If everything was to be melted, there would only be enough metal to fill two Olympic-sized pools. The reason why precious metals prices are going to increase can be explained by the simple law of supply and demand. Visit this link to read more.
There’s a lot of demand for money because everyone wants to have more of it. However, there’s only a limited amount of gold, which is the hardest monetary metal that exists on the planet. Since there will be more people who want to get a hold of it, the ones who have it at the moment would only sell it for a higher price than they bought it for. It’s the way everything works.
When the pandemic started, everyone started buying masks, and eventually, their price increased since there wasn’t enough supply to meet the demand. For that reason, it’s important to get your hands on as many ounces of precious metals as you can.
If you don’t have storage options in your home, the next best thing is to buy shares in companies that mine these kinds of metals. The price link is tight, and whenever the cost of gold increases, the same thing happens to the stocks. This is a liquid way to keep your investments and trade in the case of an emergency.
Veeramachineni Lalitha
I am Finance Content Writer. I write Personal Finance, banking, investment, and insurance related content for top clients including Kotak Mahindra Bank, Edelweiss, ICICI BANK and IDFC FIRST Bank. My experience details : Linkedin