- The U.S. dollar has been a fiat currency for more than 50 years, which in historical terms might mean its lifespan has nearly expired.
- Fiat currencies (U.S. dollar) only retain their purchasing power as long as they retain the confidence of the people.
- In 2023, China moved into the top spot over India as the world’s largest gold jewelry buyer, purchasing 603 tons.
- “Dilution” rather “inflation” more accurately describes the value of money.
Gold has been termed the eternal commodity. With gold prices steadying over the US$2,000 an ounce level, we asked business writer and market analyst Jeff Nielson in a recent podcast if now is a good time to buy gold.
Nielson shares his expertise alongside important aspects on the history of gold that present a case for the eternal value of gold today.
We dive into “no joke” buying of gold by the central bank, the concept of dilution vs. inflation, the nearly expired lifespan of the U.S. dollar, and how all of these factors prime now as an opportune time for investing in gold.
Nielson points to the central banks as the culprits in the “diluted” currency epidemic. The bank continues to print new quantities of paper currencies at increasing rates, diluting the value of the currency. “They want to play role of heroes”, Neilson says, “When they are the ones that created the problem.”
In addition, he says the U.S. dollar has been a fiat currency for more than 50 years, which in historical terms might mean its lifespan is nearly expired. As well, “The U.S. dollar already lost 98 per cent of its value versus gold,” Nielson says, adding “The last 2 per cent is not going to take 50 years, or 10, it may only take five years, and then these currencies become worthless.”
To dive deeper, check out the podcast and The Market Online’s, “Why gold is a best buy in early 2024” Thematic Insights report.
For more trending gold stories, check out Stockhouse’s gold page. For additional information on increasing the gold in your portfolio, check out more conversations with Gwen Preston at VRIC and about where the gold growth in Canada is focused.
As well, check out The Market Herald’s 2023 Thematica Gold Report.
At the close Thursday, gold was trading at a little more than US$2,157.02 an ounce.
Join the discussion: Find out what everybody’s saying about gold stocks, public companies and other hot topics about the markets at Stockhouse’s stock forums and message boards.
The material provided in this article is for information only and should not be treated as investment advice. For full disclaimer information, please click here.
