How to Buy Gold Bullion

Greece had for years been spending more than the taxes it took in. This was OK because Greece could just print more drachmas to make up for its budget deficits. This, of course, causes inflation or the devaluing of the drachma. But, many countries prefer this to trying to maintain price stability.

After Greece fully joined the European Union in 1980, it continued to spend more than it took in. It financed its overspending by borrowing Euros from European lenders and sold bonds.

The Greek balance of trade took a nosedive as the country started importing more goods than they produced. This buying splurge occurred more easily with the stable and trusted Euro than could have occurred with the drachma.

Unfortunately, Greece is having a hard time paying its debt. Said another way, lenders are having a hard time understanding why they should keep lending more Euros to Greece with no hope of being repaid.

In partial response, Greece has lowered its payments to retirees, reduced the pay of civil servants, and cut public spending.

A solution being considered is to issue a new currency for internal use within Greece. While using the new “drachma” or “eurodrachma”, the Euro could be used for foreign exchanges. The new “drachma” would start out being the equivalent of one Euro, but inflation would soon devalue the new drachma.

What About the United States?

The United States suffers from the same two “debts” as Greece: government overspending and a huge trade deficit.

The US borrows large amounts of money (primarily from China and Japan) to finance government overspending. At the same time, China and Japan import huge amounts of products into the United States so they have excess dollars to lend.

US Long Term Foreign Debt

The long term dept continues to increase with no end in sight. It’s easy to see that there is almost no possibility that the United States will ever repay its debt.

All it would take would be one or two of the more important lending nations to refuse to continue lending, and the economy of the United States would quickly collapse. The government would be forced to crank up the printing presses to cover its overspending. Inflation would spiral out of control, foreign goods would cost more, and Americans would have less.

Sounds a lot like Greece, doesn’t it?

Gold is the Universal Currency

Both the dollar and Euro can be considered strong currencies. But, one currency is even stronger. That is gold.

You can see that the “price” of gold in dollars continues on a fairly steady upward trend. This does not mean that gold is becoming more valuable. Rather, the dollar is simply declining in value.

Eventually the steepness of the upward trend in gold prices will increase as the nations of the world recognize that the “full faith and credit of the United States” that backs the dollar is increasingly worthless.

There is a way to preserve your wealth. That is simply to covert your dollars into gold. By buying gold you can maintain the value of your wealth without speculation. Gold has been a steady measure of worth for hundreds, if not thousands of years.

Shouldn’t you start investing in gold today?

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