Gold bugs often fear inflation and believe that gold will generally increase in price when inflation is high. But the correlation is not as simple as when inflation increases the price of gold increases. If it were, the inflation adjusted price of gold would be virtually flat. And as we can see from the chart below the red line is far from flat. From 1913 through 1970 the "nominal price" of gold was fixed by the government and so it remained relatively stable but that didn't mean that the purchasing power of an ounce of gold remained stable. From 1880-1914 the U.S. dollar official gold price was $20.67 per ounce. But inflation was rampant in the economy (i.e. over 90% inflation just … [Read more...]
Choosing the Right Investment: Gold vs. U.S. Dollar vs. Bitcoin
Rosland Capital recently produced an interesting infographic comparing the ten most important traits of an investment or more precisely of a store of value or currency. They offer physical gold and precious metals backed IRAs as a method to add stability to the mix. Including gold and other precious metals in your portfolio lowers your risk by diversifying from paper assets, thus hedging against the economy and inflation. The infographic compares Gold, the U.S. Dollar and Bitcoin showing how each ranks for these 10 characteristics on a scale of "High", "Moderate" or "Low". The ten important traits are: Scarcity- Being in short supply or rare. This is important because in order … [Read more...]