Wikipedia defines gold standard to be “the monetary system where the standard economic entity is measured in terms of a specific weight in gold”. Hence, the Gold Standard unit of currency is usually defined in reference to the precious metal.
Past Standard
There was no formal gold standard in the past although the Sir Isaac Newton did make an evaluation of gold and silver using his invented measurement system in 1717. Hence, many take that this kicked start the Gold Standard that was to be established. But it was only in the 1870s that there was an official Gold Standard.
With the establishment of an official Gold Standard, many governments began adopting this official gold standard for trading currency notes amongst themselves. The users of the Gold Standard view the standard as a contrast to the expansion of debt and credit. It is not possible for any government to generate arbitrary funds that are backed by gold unlike the fiat currencies of today.
Gold Standard Opposition
With a Gold Standard, it is not possible to create an artificial inflation through currency devaluation. Hence, the monetary authority’s credit is constant; there is no ‘currency uncertainty’ with more lending encouraged.
However, not all countries adopted the Gold Standard of the day; they manipulated the paper currencies which led to debt crises and currency depressions where the central banks manipulated the currency until inflation comes on.
One example of this occurrence was the 1819 panic in U.S. when the country’s second National Bank turned more towards paper-based currencies with opposing movements against the Gold Standard that was politically motivated. Hence, the Gold Standard started to lose its grip over many industrial nations and the international market. It was decided that the Gold Standard was dropped as a consequence of its lack of support and functionality in most nations with the emergence of fiat currency.
It was only the private institutions that continued with the digital gold currency and used accounted gold in grams as money form.
Rise of the Dollar
The US was on a gold standard for the most part from 1795 to 1971. In 1933 we were taken off of the gold standard domestically, meaning citizens could not exchange dollars for gold but countries still could. Then in 1971 Nixon removed the US from the gold standard for good, thus causing inflation to begin to rise dramatically. Since then the dollar has lost over 80% of its purchasing power.
Monday, September 12, 2011
Many Gold Options
Gold has been around since the dawn of time. Its value has been on the rise since a decade ago. This has caused many individuals to consider getting some for themselves as a portfolio diversifier.
Global Gold Markets
You can purchase gold from any of the valid gold markets available in the world today whether at night or in the day. The time zones have allowed this special feature to happen that causes gold to be traded around the clock although the top two gold markets are found in New York and London.
The oldest gold market is the London market which sets the ‘gold fix’ for the day at two times of the day; namely, one at 10:30am and the other fix at 3pm.
The second largest gold market, the New York market, is noted more for futures contracts. Other available gold markets are found in Zurich, Sydney, Hong Kong and Tokyo.
Gold can come in many forms depending on your purposes.
Bullion Coins and Bars
One way to own gold is through purchasing gold bullion bars of various sizes and weights. Gold bullion is most popular with small time gold buyers as it is the cheapest form of gold investment. An international refiner stamp on your gold bullion piece will make it more saleable.
Gold bullion coins are also very popular with gold coin collectors as they are actually a nation’s money with a guaranteed amount of gold in its content and not the coin’s face value. The actual worth of the gold piece is the amount of gold content with the gold price at that point in time.
There are different sizes of bullion coins representing different pure gold content. These are legal tenders that are guaranteed by their respective country of origin. These coins can be purchased or sold easily anywhere as there is always a ready market with the increasing gold prices today.
The more popular bullion gold coins include the American Eagle, the UK Britannia, the Australian Kangaroo, the Austrian Philharmonic coin, the South African Krugerrand and the Canadian Maple Leaf.
Gold bullion coins can appreciate in value very quickly as they have an artistic appeal with an intrinsic value. The different designs of the various gold bullion coins reflect the country’s beauty and symbol. They make good memorable gifts as they are portable and easy to store.
Hence, more and more individuals are purchasing bullion coins and bars for many reasons.
Global Gold Markets
You can purchase gold from any of the valid gold markets available in the world today whether at night or in the day. The time zones have allowed this special feature to happen that causes gold to be traded around the clock although the top two gold markets are found in New York and London.
The oldest gold market is the London market which sets the ‘gold fix’ for the day at two times of the day; namely, one at 10:30am and the other fix at 3pm.
The second largest gold market, the New York market, is noted more for futures contracts. Other available gold markets are found in Zurich, Sydney, Hong Kong and Tokyo.
Gold can come in many forms depending on your purposes.
Bullion Coins and Bars
One way to own gold is through purchasing gold bullion bars of various sizes and weights. Gold bullion is most popular with small time gold buyers as it is the cheapest form of gold investment. An international refiner stamp on your gold bullion piece will make it more saleable.
Gold bullion coins are also very popular with gold coin collectors as they are actually a nation’s money with a guaranteed amount of gold in its content and not the coin’s face value. The actual worth of the gold piece is the amount of gold content with the gold price at that point in time.
There are different sizes of bullion coins representing different pure gold content. These are legal tenders that are guaranteed by their respective country of origin. These coins can be purchased or sold easily anywhere as there is always a ready market with the increasing gold prices today.
The more popular bullion gold coins include the American Eagle, the UK Britannia, the Australian Kangaroo, the Austrian Philharmonic coin, the South African Krugerrand and the Canadian Maple Leaf.
Gold bullion coins can appreciate in value very quickly as they have an artistic appeal with an intrinsic value. The different designs of the various gold bullion coins reflect the country’s beauty and symbol. They make good memorable gifts as they are portable and easy to store.
Hence, more and more individuals are purchasing bullion coins and bars for many reasons.
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