The Prudent Investor's Guide to Owning Gold

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Austin Ph.D Pryor. The Prudent Investor's Guide to Owning Gold

Introduction

The birth of money

Why gold makes good money

The switch from gold to paper money

Banking and the lending of money

How banks create money

How banks create inflation

Why more money leads to higher prices

How governments raise money

The inevitable government takeover of banking and the supply of money

The beginning of the end of the U.S. dollar

“The death of money”

The national debt: $43,600 per person ... and growing

When a currency becomes worthless

Increasing your emphasis on tangible assets

Which kind of gold investor will you be?

What portion of your assets should you allocate to gold?

For the long-term accumulator: Investing in gold coins

Another option for the long-term accumulator: Gold bars

A newer option for the long-term accumulator: Digital gold

For the opportunistic trader: Investing in exchange-traded funds

Also for the opportunistic trader: Gold-mining companies

Another precious-metals option: Silver

The case for gold going forward

The risks of investing in gold

Charting your course

Wrapping up

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What is inflation? In layman’s terms, it’s when your money doesn’t buy as much as it used to. Why does that happen? Sometimes price inflation is caused by a change in the normal supply/demand forces of the marketplace. For example, prices are likely to go up when:

•A natural disaster, such as a flood or drought, devastates food crops and fewer come to market;

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Determined not to be refused, Jones goes on, “But I need the workbench now! Look, you’re bound to use those nails eventually. But, even in the meantime, you can probably trade them to someone else for something you need. I’m always getting offers of trades from people wanting nails. They’re a lot easier to exchange than furniture.”

“You have a point there,” ponders Smith. “I do seem to have a lot of trouble exchanging king size beds for clothes. This way, I’d only use as many nails as I need for each purchase... Well, okay—I’ll try anything once.”

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