Gold is one of the most stable investments known to man, especially as a long-term investment. Gold is so powerful that it can even compete with government paper money. Over a long period of time gold will even defeat a government currency. With gold prices rising, the fed raising interest rates, and weak currencies worldwide, interest in gold has been increasing as a way for investors to fight inflation.

Fiat currency can remain valuable if the amount of the currency stays about the same with some longevity and there is a demand for the particular currency, which usually is the case in the initial stages of a fiat currency. Eventually, countries run into some sort of trouble and the temptation of instant money causes governments to resort to the printing press. Over a period of time this type of behavior causes inflation, dropping the purchasing power of the currency until it becomes worthless.

The main reason gold can protect against inflation is because it is impossible to have an unlimited supply of gold. If a country wants more gold it either has to mine it or trade goods for it. Government fiat currencies, however, can be printed to almost limitless amounts - even if there is a paper shortage governments could just add some zeros to the bills that they print.
Why is gold the next big thing?

To help understand why gold will be the next big thing we have to look at what the average investor has been through recently. The average investor saw a rise in technology stocks in the 90s. Many investors did not take profits while the technology sector was at all time highs. While the average investor was loosing most of their money in technology, the housing market started to look like a fair trade off for lost profits experienced in the tech sector. Now, with Fed rate hikes and the rising cost of energy to heat and cool a home, the average investor is about to lose their shirt again.

When uncertainty of social security, political turmoil around the world, and a weak dollar are mixed together, a gold bull market presents itself. Seeing the affects of inflation, the average investor will want to protect their wealth in something that is stronger than a tech stock or a ridiculously priced home. Gold will be the best investment vehicle to suit the needs of the average investor.

The only way that the fed will be able to respond to a gold bull market is by printing money, credit expansion, and interest rate manipulation. Many of the fed?s tactics will not be effective for the problems that the dollar is about to face. How the fed responds will impact the speed of this gold bull market. If fed chairman Bernanke floods the country with money, gold might pull back for the short term, but the long-term consequences could be disastrous for the dollar.

Debt is another issue threatening the value of the dollar. The Unites States has more debt than any other nation in the history of mankind. There is no plan for paying down this enormous debt; the debt levels of are only likely to increase because of government spending. Some people make the case that the debt levels don?t matter because the debt we owe is to ourselves.

For example, if dollars are used to purchase goods and services then we owe ourselves a massive amount of goods and services. It is hard to imagine how we will deliver any of these goods and services when we consider the fact that almost everything comes from China. So, we can?t pay ourselves the goods and services that we owe ourselves even if we wanted to. Combine the current debt levels with the country?s trade imbalance and you have a recipe for serious monetary troubles.

The dollar is the most widely used currency in the world. Any weakness in the dollar is going to be good for gold. Gold has been in a bull market for a few years now undetected by mainstream investors. Many of these same investors will eventually purchase gold, but at a much higher price. This is because investors don?t want to admit that the dollar is going through tough times and they base their investment decisions according to what they would like to see instead of making decisions based on reality. The common investor is also missing a leader; most investors are not confidant enough to make their own investment decisions. The support of gold from a famous investor, or positive mainstream media coverage, will make gold acceptable for the average investor.

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