It wasn’t always like this.
Before the advent of blockchain, money wasn’t only worth real world value and therefore wasn’t necessarily traded on a fiat currency. It was also worth its real world value in exchangeable commodities, particularly silver and gold. It also held tremendous real world value in its physical form as well. Because the majority of people in the early 21st century are still living in the days of the silver, gold, and copper economies (before they became the modern monetary units), it didn’t matter that money didn’t hold real world value. A dollar held only very little real world value; the more of it someone had, the better off they were. And as gold and silver depreciated in value throughout the 1980s, it didn’t matter that the price of gold skyrocketed.
This is precisely why precious metals are considered more risky investments than fiat currencies, despite holding much less value per unit. This is also why precious metals had to go through an incredible amount of price corrections in the early part of the 21st century (the most recent being the 2013 crash) in order for them to regain their value.
It’s also why a lot of people still have their eyes set on gold.
Because the future is still bright for the precious metals today, the value for the metal has continued to rise despite the fact that the value of its physical form is constantly dropping. (In addition, there’s a real risk that these value gains will get eroded in the near future for reasons we don’t yet understand). So long as people continue to buy the metal despite all the volatility around the price today, the precious metals are likely to return to their original highs and to continue to add value. That’s because the fundamentals of gold remain as solid as ever:
1. It’s incredibly easy to store
I’ve written numerous articles about how easy it is to store silver. And that’s not just because of its price. In fact, silver is really easy to store; you just want to have a good supply around, you simply need a good safe storage solution.
The only concern, as I noted above, is that people are now storing these precious metals for speculation rather than for the store of wealth intended to ensure that wealth can be held safely (ie: a secure bank account, retirement account, or pension). This is a mistake that should never happen once you’ve got an understanding of the fundamental properties of precious metals in relation to each other. (By
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