Why We Buy Gold: The Secret Wealthy Investors Learned from History

Gold is often referred to as a store of wealth, but what does that mean? Gold is not just a shiny metal but a powerhouse against government spending, hyperinflation, and currency collapse. Discover why gold stands tall as the ultimate hedge in today’s unpredictable financial landscape in today’s video.

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So often we refer to gold as a store of wealth what does that mean exactly and in the context of modern usage how does it apply to you the answer to this question is the root of why people buy gold and why it remains a popular investment

Today hello and welcome back to another episode before we begin please take a moment to like And subscribe to support the channel thank you the world is often full of contradictions when you’re a kid learning to drive your parents tell you to keep both hands on the wheel while

You watch them cruise down the freeway answering the phone we encourage others to eat healthy but end up at a drive-thru ourselves and my all-time favorite we refer to gasoline as gas even though it is clearly a liquid gold has some contradictions to answer for itself and

One of those is its reputation as a store of wealth how can we say this is a store of wealth when the price of gold Rises and falls with greater volatility than the dollar well Gold’s title as a store of wealth and a hedge is well earned throughout

History but difficult to explain or quantify if you’re not a historian we’re going to attempt to do just that today so the next time you’re struggling to explain to friends or family just why you’re buying gold you’ll have the perfect response and we’re going to tell a tale of gold and hyperinflation and

Its role during the period between World War I and World War II when the Yar Republic in Germany presided over a period of hyperinflation and World War I had just ended Germany took the blame as the losers as the war guilt clause in the Treaty of Versa named them and their allies

Culpable the consequences of being named a guilty party and forced to pay reparations is ultimately what led to Hy inflation and it is the exchange rate between German marks and the US dollar that will give us a perfect Benchmark to compare gold to you see the Yar Republic mismanaged their economy and the

Reparations they were forced to repay how to payb other countries for the war the Yar Republic simply printed money and they printed as much of it as they needed to or wanted to so prior to the war you could exchange four marks for US

Dollar by 1920 it was 69 marks to $1 us and the Yar Republic continued printing money they printed and printed and printed by 1922 the government was printing million Mark notes and by 19231 US dollar was equal to 1 billion marks people would bring wheelbarrows full of these worthless paper marks to

The bakery to buy a loaf of bread children would stack them like bricks playing with them in the mud and the streets they literally had less value than toilet paper the stories coming from Germany at this point were unreal it’s difficult to imagine but foreigners walk into town with a single US dollar

And go out on the town for a night and have money left over when morning came speculators were shorting the German Mark like crazy he had students coming into Germany and purchasing rows of houses with allowance money that their parents gave them hyperinflation caused all kinds of chaos now some Germans did

Well for themselves because of it they did very well if they were producing or manufacturing things whose inputs came from Germany if they were then exporting it and selling in other countries and receiving foreign currency that had value but a lot of people struggled to survive during this time and it’s

Ultimately the economic chaos that gave rise to extremism as people sought more and more extreme methods of recovery and eventually this environment made way for Hitler to rise to power how does this relate to Gold well in this particular economy people turned to barter but for those who stored their wealth in gold

Gold still had its value and was used as a currency the German marks are worthless and and this is because the WMA Republic had taken Germany off the gold standard to finance the war and it’s what enabled them to print money without limit gold could be used for

Barter or his currency which some people did or it could be converted into a foreign currency that still had value in the year 1923 an ounce of gold was worth about 20 to 21 US dollar those who held precious metals were okay and gold was the ultimate hedge and the ultimate

Store value and this story from 1920s Germany shows us that regardless of what is going on he will always be able to use gold as a means of trade and security it’s why gold is considered a store value it’s why it’s considered a hedge against government spending and

Inflation it is these examples of hyperinflation where gold and silver really shine now if you think hyperinflation is an isolated incident relegated to Dusty history books crack open a book or a web browser and learn about Zimbabwe Hungary Yugoslavia Greece Argentina Iran San Yemen and Venezuela even now news reports of food inflation

Reaching 30% month over Monon are trickling in from countries around the world at the root of hyperinflation is gresham’s law Gram’s law May best be described as an observation rather than a law it says that bad money will push out good money governments start taking precious metals out of money at first by

Reducing Purity and then doing away with it all together and this gives governments the freedom to create whatever fiscal policy they prefer to benefit themselves or their countries on today’s world there are zero countries remaining on the gold standard Switzerland is often cited as the last country to leave the gold

Standard back in 1999 ever since we left the gold standard there has been enormous concern from supporters of the gold standard that we would eventually print ourselves into a hyperinflation environment and as the supplies increased following the Breton Woods agreement we have seen an increase in the price of

Gold now remember that gold technically is not increasing in price the value of gold has always remained the same if you went out in 1940 an ounce of gold get you a nice suit and today an ounce of gold can get you that as well but if you

Spend dollars you would have paid something like $40 to $45 for a nice suit in 1940 you can barely buy a shirt for for $40 in the US today let alone a full suit so it’s not that gold is increasing value but rather that the value of a dollar continues to

Decline now of course gold is traded on dollars and it’s traded in a free market so there are going to be price swings and volatility but when someone buys gold they’re doing it with the understanding that it is a long play meant to be a hedge against government mismanagement hyperinflation and

Currency collapse while any of those things may cause Investments to nomin dollars to drop gold should remain robust in retaining its value in other words it functions as a store of wealth it’s also used in other ways such as collateral for a loan or an investment that appreciates in dollar denominated

Value but remember that its primary purpose can best be understood through the lens of History so when we see potential cracks of the system that might lead to currency collapse it Spurs precious metal purchases that’s why gold is suddenly purchased when a war breaks out it’s why we had a spectacular increase

In demand for Metals when Silicon Valley Bank collapsed and precipitated a series of Bank runs and bank failures the wealthy and the investor class have learned the lessons of history and understand that gold and silver are the ultimate hedge and luckily with the help of the Internet it’s never been easier

For you to secure your own future in the same manner with reliable Investments you can hold in the palm of your hand and it’s all we have for you today please remember to like subscribe share with a friend thanks for watching we’ll see you next time