Physical gold is real money. No other currencies withstand the purchasing power of gold over thousands of years. Investing in gold is not spending or using up one’s financial assets, but preserving it. Most of the major currencies now such as pound, yen, us & Canadian dollar are slowly losing their purchasing power. Thus, listed below are few reasons why everyone is encouraged to devote themselves in yellow bars.
Gold maintained its worth
Gold has a track record of high-performance index especially during inflation when the cost of living is increasingly on the rise. It has been an excellent hedge against currency devaluation or inflation as its worth tends to be maintained or increased.
No one’s Accountable
The production of physical bullion is not within the control of bankers or politicians. They have to be dug from the ground and be formed in a very complex and pricey approach. Nature itself hinders the massive production of gold and cannot be manipulated compared to the production of paper money.
Supply and Demand
Regardless of changes in the prices of gold, its supply increases moderately every year. Since it cannot be created easily due to environment restrictions, production cost, and nationalization threat, it cannot be produced as easily as paper currencies. Increase of supply in the printed paper money with less demand means less value. Thus, the future economic downfall is inevitable, and gold is the first-rate substitute to any paper currency.
As a major hedge for future economic breakdown, central banks became the largest buyers of gold. Likely, Chinese government encourages its people to invest in gold bullion, putting 5% of their savings to the said commodity.