Gold as a hedge against inflation
Owning gold as a hedge against inflation (or hyperinflation is one of the best (and oldest) ways, as the case may be) and this is because as the dollar declines in value, it takes more of them to buy the same amount of gold.
So the price of gold will likely continue to go up in an inflationary environment, all other things being equal.
Add to that a mass rush into gold assets, and there is a good opportunity for capital gains on top of merely hedging against inflation, but that is not the primary concern driving many investors to gold assets.
Instead, many are investing in gold to protect the buying power of the money they currently have.
Many investors, worried about weakness or potential collapse of the international banking system, which has been quick to take on massive amounts of debt in recent decades, are deciding to avoid any kind of paper or electronic trading of gold, and opting instead for physical delivery of gold.
This is the only way to completely guarantee that in the event of a bank default, the gold you own remains actually in your possession. This has caused a boom in the sale of safes and other security vaults to store gold at home.
Gold as a barter currency
In the event of a “Black Swan Event” such as a collapse of the banking system, many are investing in gold, not for profit, but to use it for bartering for goods and services in a post-dollar America.
The Federal Reserve is actively inflating the economy and devaluing the currency by printing money (euphemistically called Quantitative Easing).
At some point, many Americans are reasoning, either America must default on its debt (which it is not allowed to do constitutionally), or hyper-inflate the currency to pay it off in devalued dollars.
If or when the U.S. dollar gets to that point, it will be basically worthless.
Gold will be in the middle of a huge asset bubble (at least denominated in U.S. dollars).
That could lead to Americans finding other items of value (gold and silver coins, perhaps) to trade goods and services.
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