Why is everyone buying gold at the moment?
Nacho-Nick asked:
Im wondering why everyone is buying gold at the moment. There seem to be alot of adverts on TV for buying old jewelry. Is this whats known as a Gold rush? If so why does this happen now and then?
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Im wondering why everyone is buying gold at the moment. There seem to be alot of adverts on TV for buying old jewelry. Is this whats known as a Gold rush? If so why does this happen now and then?
Also as a bonus question why is money no longer backed by gold / gold standard?
Thanks
March 9th, 2010 at 4:19 am
Folks are buying gold because they have very little confidence that paper money will be worth crap in a few years. And that too is the reason money is no longer backed by gold. Have you not noticed the collapse in the value of the dollar since removing its gold backing? When I was a kid an ice cream cone was a nickel. Coffee a nickel a cup. Coke a nickle. Candy bar a nickle. Stamp 3 cents. Gasoline 25 cents a gallon. Loaf of bread 15 cents. A house $12,000. A car $2,000. Bus ride a dime. muncie birder
March 10th, 2010 at 3:06 pm
In a word, Stability. When there is a money crisis, gold is in demand as it always holds its value, regardless of the state of the Stock market. Poor interest rates also encourage buying gold, since there is little incentive to invest, so holding gold for its stability, and possibly profitting by speculation, is a safe choice.
The expression, “Gold Rush” was used to refer to large numbers of people heading out to territories where gold had been recently discovered, in the hope of prospecting for some themselves.
Gold Standard was dropped at the Breton Woods conference, because it was recognised that it limited the amount of international trade to the value of the purchasing nation’s gold reserves. Alex G