Why Own Gold?

Gold is first and foremost a form of wealth insurance – protection against the periodic setbacks suffered by traditional paper assets, including stocks, bonds and currencies, especially the US dollar.

In the last several years, we have seen Gold fulfill its role as wealth insurance in the face of a series of crises involving everything from terrorist attacks to bank failures. However, in the 1990's, Gold’s key role as wealth insurance was not so apparent to investors. The 90’s were characterized by rising stock markets, a strong dollar, low inflation, stable interest rates, and peace and prosperity. Most investors saw little need for Gold in their financial plans.

Just because a portfolio did fine without Gold during the 1990’s does not mean that the protection it provides was not needed. A weakening dollar, market crashes, investment bank collapses, and international turmoil are all cyclical events we continue to witness. Those that held Gold through these times have not only protected their wealth, but have seen the price of their Gold rise substantially.

The simple fact of our history has continued to indicate Gold must be a permanent fixture in every portfolio. Here, at Prime Gold Vault, we also practice what we preach. Every Gold & Silver Analyst and Consultant including our President and C-Level Executives, all hold substantial Gold within the framework of our proprietary strategy. Why, because we know how to anchor our wealth. 

Gold & Financial Markets

Rising gold prices often indicate a declining currency. Over the past 50 years, gold prices have surged due to inflation diminishing the value of fiat money. For instance, $20 today doesn't buy what it did a decade ago. To match the purchasing power of 1971, one's salary would need to have increased 15-fold, yet it has only grown 5-fold.

Historically, citizens could hold their government accountable by converting dollars to gold, as the debt level was anchored by the gold reserve. However, this changed in 1933 when President Roosevelt confiscated gold coins and certificates, devaluing the dollar's purchasing power by 42%.

For 41 years, owning more than five ounces of gold was prohibited unless it was in the form of rare coins. In 1944, the US dollar became the World Reserve Currency, tied to the gold price of $35 per ounce. Yet, the dollar was not truly "as good as gold". This led to challenges like the Vietnam War and stagflation, prompting the creation of a gold-backed currency called SDR by the IMF.

In 1971, President Nixon stopped foreign governments from converting US dollars into gold, shifting us from a Gold Standard to a "Debt Standard". Even with the official price of gold set at $42.22 per ounce, due to inflation and massive debt, gold remains undervalued. Central banks have been discreetly purchasing significant amounts of gold and silver.

The visible price of gold is influenced by the 'spot gold', a Wall Street tool. Central bankers have even admitted to manipulating the gold price. Alan Greenspan, a former Fed Chair, once expressed that without the gold standard, savings cannot be protected from inflation.

Despite the perceived insignificance of gold, its price has jumped from $20 to $1,800 by 2020, showing the dollar's 98% loss in purchasing power since 1913. There are concerns that the ongoing monetary experiment could fail and result in an unprecedented financial crisis, prompting talks of "the great reset". Gold and silver, historically proven, act as safety nets to protect and maintain purchasing power in such times. To ensure lasting wealth, one should consider investing in lasting wealth instruments like gold.