As a retired psychologist who has ardently practiced mindfulness meditation for about 35 years, I strongly value being as fully and as accurately aware as possible of both inner and outer reality. For me, this is in keeping with the wise and often cited verse from Proverbs, "where there is no vision, the people perish,"
Seeing clearly in a world as filled with complexity, non-transparency, deception and outright lies as ours is, however, is a very daunting challenge to say the least and demands a great deal of diligent searching for the truth.
In this regard, I'd like to summarize very briefly here what I've become aware of recently in researching the importance to one's financial future of buying gold. I hope it will be helpful to others who are interested in getting an accurate answer to this important question.
To this end, I think it's important to understand the following basic background facts:
1. Gold has long been a basic standard of economic exchange in many of the world's great empires. In more modern times, it has officially become the standard to which other currency was pegged, first as the gold specie standard and later as the gold bullion standard. The former was started in Great Britain in 1821. Canada followed suit in 1853, as did the U.S. and Germany in 1873.
2. In these and other countries, these standards have been abandoned as a result of monetary crises associated with economic depression and/or war. This happened in the British Commonwealth at the outset of WW I, in Germany in the 1920's and in the U.S. in 1933.
3. After WW II, the Bretton Woods Agreements set up a system similar to the gold standard. Through this system, many countries fixed their exchange rates relative to the U.S. dollar. The U.S., in turn, agreed to maintain the price of gold at $35 per ounce. Effectively, then, all currencies pegged to the dollar also had a fixed value in terms of gold.
4. This collapsed in 1971 when President Richard Nixon ended the direct convertibility of the dollar to gold in order to help fund the Vietnam War. This breakdown came to be known as "Nixon Shock." Since then, the monetary systems of nearly all nations have been based fully on "fiat money"-i.e., currency declared by a government to be legal tender even though it has no intrinsic value and is not backed by gold or silver. For this reason, it is at high risk of becoming devalued or even worthless through hyperinflation.
5. For more than 70 years, the U.S. government has resorted to printing fiat money to stay financially afloat. For approximately the first 40 of these years, this was done quite cautiously, and the US dollar continued to maintain its trustworthy status as universal money. The resulting debt incurred through this process started accelerating significantly from 1970 through 1990 and has soared dramatically since then, riding continuously on the international reputation of the dollar. This has allowed Americans overall to enjoy a standard of living well beyond their means. The level of this national debt has now become staggering-amounting to around $62,000 per American family.
Our current financial predicament as a nation, then, is highly analogous to that of an individual who is at high risk of bankruptcy. In other words, if our national creditors were to stop trusting in U. S. dollars and if those dollars consequently lost their acquired status as the world's universal money, this enormous bubble of debt could precipitously burst. On the basis of historical precedents in other countries, this would not only destroy American wealth through hyperinflation, but would likely seriously undermine our American liberty as well.
The only way to protect oneself against this potential financial catastrophe is to shift funds into something of intrinsic value that will continue to retain its value in spite of such an eventual collapse of the monetary system. Due to its very long history of value maintenance through monetary crises, gold is the commodity most commonly chosen as an optimal means of securing at least a part of one's wealth.
In considering this option, it has been highly important to me to study the history of the gold market -especially over the past several years-and to gain a clear vision of its probable trajectory in the near future. In doing so, I have also taken into account the current consensus of several respected financial experts, including Mark Faber, Michael Maloney, Robert Kiyosaki, Mark Arbeter, Mark Luschini, Scott Redler, and others.
Over the past 11 years, gold has steadily increased in value from $253 per ounce on 9/99 to $1,266 on 6/28/2010-an average of 45% per year. Without exception, all of the above authorities predict that this rise will continue. Some of them, in fact (Mike Maloney and Robert Kiyosaki, in particular), argue strongly that it will continue to rise MUCH higher-to $5,000 per ounce, or beyond, in the next few years.
I find Mike Maloney's reasoning in this regard to be strongly compelling. He points out that this run-up on gold is being driven first by markedly increasing concern about the progressive deterioration of fiat money systems throughout the world. In addition, this is the first time in the recent history of the gold market that the populations of Russia, China, and large South American countries are positioned to contribute in a major way to the demand for gold. According to his analysis, this-all by itself-effectively doubles the demand for gold.
As a result of this extensive due diligence, I have arrived at the fairly strong conclusion that most people would probably be wise to convert at least some of their money into gold. This view has been strengthened in learning that it's now possible to buy gold in very small (1 gram and 0.5 gram) quantities and to have it stored without charge in the vault of a highly prestigious Swiss bank. At least one company has also developed a gold cash card that allows its customers to pay for purchases from their gold account.
Even more impressively, this same company pays attractive commissions to their customers for referring others, who then become customers as well.
For further information, please click on the link below.
George Shears is a retired psychologist, mindfulness meditation co, and business mentor. He has personally practiced mindfulness meditation for 35 years and pioneered the first Mindfulness-Based Stress Reduction program in Minnesota, starting in 1995. He can be contacted at:
