What if in 1971 president Nixon didn’t allow Americans to start using paper dollars that were no longer redeemable in gold or any other “fixed” monetary reserves? What if there wasn’t growth of our public debt due to the Republican party’s doctrine that deficits resulting from tax cuts don’t matter? And what if financial institutions and other multi-million dollar conglomerates simply weren’t allowed to use pointless speculation about stocks, bonds, etc. to procure billions of dollars from the US economy, while being saved from their bad dept by the Federal Government? Well, the US wouldn’t be in the pickle it is right now shouldering 13+ trillion dollars (45% of the world debt) worth of debt. All signs point to the pluses of stabilizing your portfolio with tangible investments in gold.
Historically, investors have used gold as a financial refuge in difficult times. Mark Bristow, CEO of Randgold Resources Ltd., estimates that safe havens will be in demand again next year as the economic crisis drags the global economy into a correction. Bristow recently stated that in spite of the current uncertainty surrounding gold’s price direction, in 2011 it is likely to reach $1,500 an ounce.
Market changes are proving that now is a great time to diversify your investment portfolio with gold. China, one of the worlds largest producers of gold, has recently played a role in gold’s higher prices as a result of their new policies. In an attempt to liberalize the gold market they will allow dealers and banks to freely export and import gold.
In a time of uncertainty about the economy and the value of the U.S. dollar, purchasing gold is seen as a time-honored way of hedging your bets. Although a gold-based international monetary system might never become a reality, that hasn’t stopped governments like China from encouraging their citizens to increase gold investing. Today, U.S. citizens rely on a monetary system that requires trust in banks, and belief in the value of plastic credit cards and pieces of paper. Imagine how outlandish a gold-less monetary system must have seemed before 1971. Sometimes change is good. But, where your investments are concerned, gold still means security.