Money Talk Daily

Sometimes a little history can straighten out some big errors.  Like this whopper…

“You know, if we do have an economic meltdown, I’d sure rather have my money as cash in my hand rather than in something like gold or silver coins.  What happens if nobody wants that gold or silver?  And what can you buy with it?”

This one is easy to fix.

• Do a search and see how long gold has been valued and used as money.  (Hint:  Answer will be around 6,000 years.)
• Now do a bit of research on the history of paper currencies to find out how many have retained their purchasing power permanently, let alone in crises. (Hint:  None.  They all have become “museum pieces.”)
• Conclusion? It is far more likely that your gold or silver coins will retain their value than your paper currency.

Now it might well be that using a one ounce gold coin in trade could be a problem because it’s worth over $1,000 and you are trying to buy a cheeseburger. But that problem is easily solved by using fractional gold or silver coins. Or you could sell your gold or silver coins for whatever paper currency is currently in use and spend that money.

Anyway, we are not talking about convenience here but rather the ability of paper money to retain value as compared to precious metals, particularly if there is an economic crisis. The likelihood that you are going to wind up with a sack of worthless gold or silver coins is vanishingly remote. But what about your paper currency?

Study history.