Gold Bullion Price Rises Mean Money in Your Pocket

You may be interested in the gold bullion price for several reasons.

Gold Bullion Price

First, if you are an active day-trader you may want to buy and sell gold mining stocks, ETFs, gold futures or other instrument that can be traded on a minute-by-minute basis. If this is you, the current gold bullion price is important and you want to be kept up-to-date about news in the financial, political, and mining world constantly.

Second, if you are interested in the purchase of gold bullion for the long haul you may have a curiosity about current gold bullion price. But, you will not need to be constantly updated about daily or hourly fluctuations in the price of gold bullion. You understand that gold represents real money, but dollars, Pounds Sterling, Yen or other currencies are merely paper with no intrinsic value. As nations print every larger quantities of paper money, this money loses value and the gold bullion price will inevitably rise.

Third, many people are simply thinking about venturing into precious metals. They have heard about investing in precious metals but haven’t yet taken their first step. While they may see the gold bullion price in a prolonged upward trend they are not yet convinced. These people are sometimes frightened by the week-to-week and even month-to-month changes in the price of gold. Yes, sometimes gold prices decline for several weeks or months. That is a little scary when you first start out.

Gold Bullion Price With Other Precious Metals

It’s certainly fun to watch the prices of precious metals change minute by minute. But, the real question is: What are you going to do about it?

The Gold Bullion Price Increases Can Mean Financial Security

Basic principles are important when it comes to investing in gold bullion for the long term. You should consider these basic principles when you think of gold bullion. Daily, weekly, or even monthly fluctuations in the price of gold, candlestick charts and other day trader terminology are not what we think of while investing for the long term.

What are some of these basic principles?

First, gold is the world’s standard of value. Gold has been a standard of value for thousands of years. It can be traded for a fairly consistent “market basket” of goods and services without regard to the year or the location. In ancient Rome an ounce of gold would buy a rather handsome, finely made toga. In colonial America, an ounce of gold would buy a very nice suit of clothing. Today, an ounce of gold will still buy a high quality dress or business suit.

The value or buying power of gold is constant and recognized all over the world. The increasing gold bullion price reflects the declining value of the currency used in pricing gold.

Second, while gold is a standard of value, currency is not. All the currencies of modern nations are called fiat currencies. This is, they are not backed by anything of value other than the respect of other countries. We say, for example, that the U.S. dollar is backed by the “full faith and credit of the United States,” whatever that is.

In modern times, prior to 1971 the U.S. dollar was backed by gold. President Nixon removed the gold backing and allowed the dollar to “float” among the other currencies of the world. Today we have the FOREX market or FOReign EXchange market where various fiat currencies are compared to one another. Traders guess at the future exchange rates and hope to make money as one currency gains or loses value compared to another currency.

For most currencies, the gold bullion price continues to increase showing that the actual value of the currency is declining.

Third, elected officials in modern nations like to spend more than they like to tax. As the bureaucracies of modern nations expand, they spend more money to acquire more power. The more people dependent on the government for their daily lives, the better for those in power. But, to pay for all the promised goods and services the governments must borrow or print an ever increasing supply of their currency.

This reduces the relative value of the currency and causes “inflation” which makes the price of goods and services increase. Along with everything else, the gold bullion price rises also.

Fourth, money is not issued by the government, but by private banks which charge interest for it’s use. When you or the government borrow money you have to pay interest on the “debt” you owe to the bank. Local banks borrow money from the Federal Reserve, then lend most of it out to borrowers.

The borrowers pay creditors who deposit the money back in the banks. The banks lend this money out and so multiply the money supply because of fractional banking. Banks can lend the same dollar out numerous times as it makes the rounds from borrower to creditor to borrower to creditor, and so on. All this created money has no intrinsic value which is why the gold bullion price must increase.

Fifth, as the money supply increases, there are lots of dollars seeking to buy limited goods and those with the goods will charge what the market will bear and raise prices as high as possible. This causes inflation.

Inflation is simply the name governments give to the fact that the value or buying power of their currency is declining. For some countries, reducing the value of their currency is a policy. The United States, for example, is attempting to reduce the value of its currency so goods manufactured in the United States will be cheaper to foreign buyers. This will increase the flow of goods shipped abroad, increase employment and decrease our balance of trade.

Finally, fiat currencies are never permanent. Most sources indicate that the average lifetime of a fiat currency is 27 years. Eventually people will seek a standard of value that does not become worth less and less.

This gets us back to gold. You should now be able to understand why the gold bullion price should continue to increase.

To summarize these concepts, the following fun to watch video may be helpful:

THE REAL TRUTH ABOUT FIAT MONEY AND THE BANKING SYSTEM?

The gold bullion price will continue to rise as the value of the dollar declines. This means that you have access to a real standard of value in gold. If you are interested in making gold a part of your investment portfolio, you should set up an account with a recognized gold bullion dealer that has been both a trusted supplier of gold and that provides secure, fully insured vaults for the storage of your assets.

Check out the gold bullion price today and make your first gold investment.