Why Should I Care about Gold?
So, almost daily we hear about gold prices going up, whether it’s on a commercial or whatever. People are willing to buy your scrap gold and old gold for decent prices. Today, gold prices closed at $1,259.30 an ounce. The question is… for what end? Why do I care?
Most economic systems used to have what was called a gold standard, that is, the money in the system was based off of gold, each bill had a certain amount of gold backing. As time has gone on, this has changed. That hundred dollar bill does NOT have $100 worth of gold backing it. What gives the American dollar its value is the fact that it is the American dollar. It is completely psychological.
So, as the economy goes into recession, the confidence that people once had in the American dollar (and actually, most world currencies are the same way with the global economy as a whole going into a recession) goes with it. Thus, the value of a dollar goes down, causing inflation. If there is nothing backing up a currency but your mind, then the inflation value is going to occur a lot more quickly than if there is physical backing to your money.
Where does gold come into this? Well, the thing is, gold was the original currency. It will always have some sort of value, being a rare and precious metal. As stocks and such decrease in value, gold maintains it. The stability that possessing gold provides far surpasses the stability of any other currency or metal.
Gold value has increased 15 percent during 2010, as the economy continues to recess or at least stabilize. People are nervous about their investments, so, as I said, they’re investing in something that doesn’t lose value as quickly as world currencies do.
Is it worth it to sell your scrap precious metal for it? I’m not sure. I assume that part of it is overreacting, but it is always good to make sure that your investments are safe and secure, especially when the economy is as unstable as it is at the moment. Talk to professionals, look at your options, always do research before you invest your money in anything.
