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Gold Will Always Be Gold

Dear Reader,

You know that while many people think of the dollar as money, it’s not—it’s currency.

It has been since 1971 when Richard Nixon moved the dollar from the gold standard and made it the reserve currency of the global economy. This is the reason we’ve had so many wild economic swings in the last four decades.

The dollar is no longer an asset that can be considered a safe-haven for investors in times of uncertainty. Because it’s a currency, it’s affected by the wild swings of the market just like any other asset class. Because the dollar is a tradable currency, it’s subject to huge gains—and drops—in value based on market whims. As such, it gains and loses value all the time.

Why would anyone consider the dollar safe when the Fed has been fighting deflation with inflation, pumping billions upon billions of dollars into the economy? Don’t investors know that each time a new dollar is pumped into the already bloated money supply, existing dollars are devalued, and the bubble gets closer and closer to popping?

Why would anyone bank on the dollar when the US government is running up record debts today even though they have no way to pay for the coming crisis of Social Security and Medicare when the Baby Boomers retire?

The only answer I can think of is financial ignorance.

Borrowed Time

There are two types of depressions—U.S-style deflation and German-style hyperinflation. I believe we’re in for both types of depression if things continue as they are. That means the dollar may gain strength for a little while, but ultimately, it’s toast.

As the old saying goes, all currencies eventually go to zero.

There is no currency in the history of the world that hasn’t eventually crashed under the burdens of debt that its government heaped upon it. The dollar will be no exception. It’s just a matter of time—and I believe that time will be sooner rather than later. Those who are betting on the dollar are living on borrowed time.

The dollar is not a safe asset. Eventually, once the crisis has seemingly subsided, all those dollars that have been pumped into the economy by the Fed will flood into the market and cause severe inflation. The middle-class will likely be devastated as years and years’ worth of savings lose value. When that happens, the last thing you want to be holding is dollars.

Precious Time

The good news is that you still have time to protect yourself. And the smart money already is. The smart money is moving into gold and silver—the precious metals. Throughout history, precious metals have saved savvy investors from financial destruction in times of dramatic economic upheaval.

That’s the difference between what I do and what others do. I save gold—no matter what the market is doing.

Notice that I say I own real gold and silver. I do not say “I invest in” or “I trade” real gold and silver.

I do not own gold to make money. They are insurance, a hedge against the stupidity of the elites. I have insurance on my car in case someone hits me or in case I hit someone else. Gold serves a similar purpose.

All investments have risk. Real gold has no risk. The price of gold will go up and down because the value of our fake money is going up and down.

When a person invests, let’s say in a stock or real estate, they expect an ROI—a return on investment—because they are taking a risk. When a person saves money in a bank, they expect a rate of return in the form of interest, because saving money in banks is extremely risky – especially when elites are printing money.

When I purchase a gold coin, I do not expect an ROI (return on investment) because I am not taking a risk. Gold is God’s money.

Always remember: the price of gold will go up or down because the value of our fake money is going up or down.

In 1972, I purchased my first gold coin in Hong Kong. It wasn’t until 1974 that it became legal for Americans to own gold. For about $20, you can buy a real silver dollar. And for about $1,500, you can buy a real gold coin.

If you are a beginner, I would not buy numismatic, rare collectible coins. That requires a lot of financial education and years of experience. The best news is that everyone—rich or poor—can afford God’s money.

Remember, gold is just gold. It will be here long after you.

Gold has recently broken out to its highest level since 2013. But don’t be surprised if a Fed rate cut provides even more fuel for the precious metal’s rally. Gold is seen as a store of value, although often a lousy one. But when interest rates are falling even though inflation is rising, well, that may be the perfect time for gold.

Why Not Gold ETFS?

The reason I want my real gold coins in my own private vault, and not paper gold coins in an exchange-traded fund (ETF) vault, is because for every real gold coin, there are an estimated 100 to 500 fake paper coins.

The fractional reserve banking system applies to everything, not only money or gold. The entire banking system is based on counter-party trust. After rich dad explained the fractional reserve banking system to his son and me, I laughed every time I saw “In God We Trust” on my money.

I prefer to trust God’s money—real gold and silver—rather than the elites who print our money, run our government, central banks, banks, bond markets, and stock markets.

You have time, I’d guess you have precious little time. Take advantage of it while you can. Even if you have very little money, you can afford to buy silver. Buy as much as you can. If you’re in the position, buy gold now.

I encourage you to read both Richard Duncan’s and Mike Maloney’s books. They will give you valuable insight into the technical reasons for what I’m writing here today—and at a level that everyone can understand.

Don’t bank on the dollar for your future. Get smart with your money, and don’t follow the lemmings off the cliff as they rush into our toxic currency.

Regards,

Robert Kiyosaki

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Robert Kiyosaki

Robert Kiyosaki, author of bestseller Rich Dad Poor Dad as well as 25 others financial guide books, has spent his career working as a financial educator, entrepreneur, successful investor, real estate mogul, and motivational speaker, all while running the Rich Dad Company.

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