Facts about Gold

The reason why gold goes up in value during times of crisis can be attributed to many things. Firstly one can look at the metal itself , it has a very good resistance to corrosion therefore it is durable, your pound of gold today will still be a pound of gold in two hundred years, your pound of steel or iron today might be a tiny heap of rust in two hundred  years. Gold unlike paper currency also has many uses ranging from dentistry to electronics, gold is an excellent conductor of electricity. To make the point even clearer, even if the entire planet’s economy collapses  back into the stone age and dentistry, electronics and NASA who uses gold to shield  their satellites from electromagnetic radiation, no longer requires it, you would still be able to make a nice ring or necklace with it and impress your wife or mistress. Paper currency on the other hand will have very limited uses, like helping to start a fire and perhaps to wipe things with.

That said , gold’s psychological value can also not be overstated, from the very first primitive men who walked the earth, right through the ages, to the rich and powerful today, everyone has or had a strange attraction to gold that cannot be denied . Hardly a civilization is known that was aware of gold and did not value it almost above all other metals. He who had the gold had power. Today this still rings true . With countries like China stockpiling gold during times when metal prices go down slightly it is also small wonder that gold price remains steady most of the time.

Perhaps some could argue that there are other things that can also be a safe haven in bad financial times, like property, if you can manage to hold on to it, property almost always recovers it’s value after a crisis. Yet property cannot be moved , cannot be sold very quickly, cannot be easily broken up into very tiny pieces and sold exactly whenever it is convenient. One cannot smuggle property out of a country where perhaps you are no longer welcome into another where it can help give you a fresh start. Gold also has one other characteristic that makes it better than any currency in the world, it cannot be easily counterfeited. Some drug dealer in Mexico won’t be making hundreds of  fake gold bars with a simple press anytime soon.

So perhaps the fact that gold is safer than houses can be prescribed to common sense if you really think about it.