Why Invest in Physical Gold and Silver ?
First of all, let me start by stating this one main fundamental that can not be disputed. If you had invested $20,000 into 56 oz’s of physical Gold in 2001, as of April 2017, you could sell it for over $93,000.
But before you start to convert your hard-earned paper money into Gold, you'll first need to research the history of it, and compare it to what you probably know best, paper money. Here, I'll share with you some basic starting points that you should consider, but is definitely not intended as an exhaustive argument for investing into gold, but rather just some points of discussion that you may want to consider.
When people ask me, "Why invest in Gold rather than RRSP's", the first thing I usually share with them is something they already know..... Gold has been used for thousands of years as a transfer of wealth(currency). RRSP's have been around for, oh let's say, about 65 years. Gold has stood the test of time, and has many uses as a commodity as well.(jewelry, computer circuits, etc). RRSP's are good to start fires with, but that's about it as they're just paper. Gold has always been sought after, and is always high-priced, relatively speaking as compared to paper money. There is no time in history when Gold became worthless, and people just threw it out. However, that's what happens to RRSP's and Paper Money Currencies quite often.
In North America, back in the early 1970's, we went off the "Gold Standard" and went to a "FIAT System". The Gold Standard is where a country backs its currency with a physical commodity of wealth, called Gold. The more gold the country owns, the more it is able to prove to its trading partners that they are what they say they are, and are able to pay back loans, etc. if needed. The Fiat System on the other hand, is based on nothing. It's basically an understanding that groups of counties have with each other, that they will all be truthful when it comes to how their country is doing financially, and that they will be able to "pay up" anytime it's required......can you see the problem with this ? If not, it's best you do research into all the ramifications of currency failures over the years around the world.
Now maybe you're asking, "Why is Gold the metal of choice?" The main reason is very basic. "An honest day's pay, for an honest day's work". Gold is difficult to get. There are no easy short-cuts to get Gold. Whether it's through mining, prospecting, or buying from a dealer, it's a hard thing to get, or costs a lot. There's a lot of physical labor, sweat and tears involved, so to get more Gold from the earth, it takes an honest day's work. Now compare that to Paper Currency. When a country wants more, they just hit PRINT on their computers, and another 50 million in $100 bills are printed. How easy is that? It takes virtually no physical effort or real work. In a few hours, the country just declares itself worth millions more in value, but really did nothing to get there. Can you now see that the Fiat System is a flawed system that cannot sustain itself ?
When the currencies in North America fail, Gold and Silver will be the only investments that will allow you to maintain your wealth. You can go anywhere in the world with these precious metals, and the amount of wealth you put into them, can be easily traded directly for food, etc., as in India, or into the local currency, to be utilised that way. Or if you stay in your country, once a new currency is started up, you simply convert your Gold into that one, for your daily needs. All your RRSP's and old bank accounts holding the old currency will be VOID.
And for a quick word on whether to buy physical Gold and Silver, or Exchange Traded Funds (ETF's). Well, the main reason to purchase Gold is because of the fundamental advantage it has as being, the real thing. A real piece of Gold in your hand, is of real value. A piece of paper that has some ink on it that states you supposedly own some Gold somewhere, is not really worth anything. Consider the reality, that ETF's are leveraged at an extremely high ratio of real physical Gold, to their issued ETF amount. Explained in simple terms, for at least every 50 ounces of Gold you pay them for, they only have 1, yes, one ounce of Real Gold in their storage facilities. BlackRock, a Gold ETF company was recently forced to stop selling, as their ratio grew to over 157 to 1. I believe you can imagine what will happen when even 2% of the fund holders decide to cash in their ETF's in return for real Gold. The company will instantly go bankrupt, and everyone who has invested into those funds, will be out all of their investment. So at that time, it won’t matter what the value of "my Gold" is according to that piece of paper, as the true and realized value will be zero. This is another reason why I recommend and sell real, physical Gold.
As a last thought, consider this...... Throughout the ages, one ounce of Gold (currently ~ $1750), has always been worth the amount to sustain a family of 4, for one month.(including Food, Clothing and Residence). When a currency fails because of hyper-inflation, 100 million dollars of that currency will not be enough to buy you one loaf of bread, as it is now a worthless currency.(again, review history of currency failures) But as for Gold and Silver, they have always, and will continue to maintain their WORTH as a commodity, and will allow you to cash-in little-by-little during those rough days, and sustain you and those you love.
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News Report May 19, 2017