Gold and Silver

Protecting the Purchasing Power of Your Money

The decline in the purchasing power of the U.S. Dollar has been nothing short of dramatic since the Federal Reserve Act was passed by Congress in 1913, gold was confiscated by the U.S. Government in 1933 resulting in a 41% devaluation of the dollar, and the gold window was closed by Richard Nixon in 1971 effectively disconnecting the dollar from gold altogether. The latter has allowed the Federal Reserve to create money out of thin air without the constraints of gold backing, inflating the money supply and further devaluing the dollar. The Fed has artificially manipulated interest rates to record lows in an attempt to control price inflation, which has predictably failed.  In order to create the illusion of low inflation rates the government fudges its official inflation statistics (CPI) by failing to include the best indicators of real price inflation, food and energy. Have you ever heard someone remark about remembering when the price of gasoline was 25 cents/gallon? We all just blindly accept the massive increase in the price as normal. It is not normal. In a free market the price would be determined by the laws of supply and demand, not by the man behind the curtain pulling the levers.

In practical terms the results have been to reduce the interest rates banks pay on deposits to near zero. So not only are your savings earning interest below the rate of inflation, they’re actually losing value due to the decline in the value of the dollar. Further exacerbating the decline in the value of your bank deposits some banks have actually begun Setting Negative Interest Rates. And if you buy groceries it should be obvious that real price inflation is much greater than official statistics.

So how does one protect the value of his/her wealth? Historically gold has been used as a hedge against inflation and catastrophe. In a free market the price of gold would reflect the value of other currencies (as currency values decline gold rises and vice versa), however, according to the Gold Anti-Trust Action Committee (GATA) “Gold already is so important that Western central banks — particularly the U.S. Treasury and its Exchange Stabilization Fund, the Federal Reserve, and allied central banks — rig the gold market every day, even hour by hour, to control and usually suppress gold’s price”. For the why and how of gold market rigging click the link above.

The price of an ounce or more of gold is a show-stopper for many people, and tying up ones liquid assets in a currency which cannot be easily exchanged for goods and services is another drawback. But what if you could exchange some of your virtually worthless paper currency for gold in sufficiently small quantities to make it affordable for almost anyone, and use that gold to purchase the goods and services you now purchase with paper. There is a simple and practical way to do just that.

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