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Buy Gold Now - How and why to buy gold

Buy Gold Now: Why should you buy gold? How do you buy gold? Investment expert Shayne McGuire explains how to profit from this precious metal and how buying gold can protect you from financial risk. Read more about Buy Gold Now >

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Swiss Bank 1 Kilo gold bar

21 - The Conclusion

The decision whether or not to buy gold, silver or platinum rests with you. The years ahead will be extremely challenging and quite frankly, frightening. Until the early 70’s our currencies were backed by a store of value – gold. In 1971 the U.S. suspended the convertibility of dollars into gold and by 1973 all of the major trading countries had agreed to follow suit, letting their currencies float freely against one another. From that point onwards the world’s major currencies have not been backed by gold, or any other store of value for that matter. The correction mechanism put in place to prevent economic excess and inflation disappeared.

So, nowadays money is just a piece of paper. Its value depends on how many of those pieces of paper are in circulation. Oh dear! The world’s governments and central banks own printing presses and for the last 30 years these have been running at full speed, causing the global money supply to increase exponentially.

Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.” Current Federal Reserve Chairman Ben Bernanke.

Government Response to the Global Financial Crisis

Money printing has become even more prevalent in response to the global credit crisis. The monetary powers are completely focused on bailing out the financial system and have now taken us so far down the inflationary path that any future prosperity or boom will not be possible without more inflation. Government will print more money in an attempt to “buy another boom”. I liken current events to the monetary powers focusing on diffusing a candle in one corner of a room, while a time-bomb situated on the other side of the room ticks down towards zero.

The alternatives to additional inflation are extremely unattractive for government. They could raise taxes to pay for the bailouts – but consumers and businesses would scream. They could cut government spending – but this means no more bailouts, so they would have to let banks fail, house prices crash and so on. Any attempt to contain future inflation and to stop the money and credit growth will be unsuccessful since the resulting credit squeeze will strangle any signs of recovery. Thus, at every hint of trouble in the economy the easy money policies will resume, the debt and money printing will accelerate and will never stop until the bitter end.

Since the only limit to perpetual money printing is the credibility of the currencies involved it is difficult to gauge when the inflation might accelerate out of control, but you can be sure that it is coming. I believe that the credibility of US Dollars and British Pounds is already evaporating and that the risk of hyperinflation - a complete loss of trust in our currencies - grows stronger by the day.

Your Action Plan

By taking appropriate actions now, individuals can mitigate the impact of the inflation on their wealth. Now that you know that the value of paper money decreases year after year, do you still want to hold cash, savings, treasuries, bonds? Knowing that the depreciation of these currencies is likely to accelerate uncontrollably in the years ahead, do you feel comfortable holding your current investments?

As a result of the coming inflation I see the prices of gold, silver and platinum increasing due to their safe haven status, their ability to store wealth and to hedge against inflation. The precious metals may suffer from market volatility over the short term, but longer-term their destiny has already been set out by the actions of government today.

In light of all of the above you need to develop an action plan to protect yourself ahead of the coming financial storm. There is a more in depth discussion of the various ways you can buy precious metals in the “How to Buy” section. I hope you have found these “Essentials” useful, and good luck.

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