Here are the 3 reasons why gold is becoming increasingly popular with investors:
1. Paper Currencies Fail
2. Central Banks Are Buying Gold
3. Billionaires Are Buying Gold
Every developed nation in the world is on a PAPER CURRENCY backed by absolutley nothing. This type of system has NEVER WORKED.
There is a reason that the founding fathers of America specifically mentioned gold and silver in the Constitution.
A major factor that resulted in the American Revolution, and the subsequent independence from England, was that the American Colonists did not want any part of England's central banking system.
A central bank is an institution that usually issues the currency, regulates the money supply, and controls the interest rates in a country. In contrast to a commercial bank, a central bank possesses a monopoly on printing the national currency.
Central banking has never worked because when you give a private bank, with private owners, free reign to control a countrys currency, unfortunately there are no checks and balances to stop those individuals from printing money irresponsibly, or to advance their own interests.
It is important to note, England's requirement that Americans accept the Central Bank of England, was one of the very reasons that Americans fought for independence in the 1770's.
And from that point until 1913, a few central banking systems came and went, depending on who was in office. President Andrew Jackson was very outspoken against central banking, and in 1835 he helped the U.S. not only become debt free, but there was actually a $440,000 surplus.
So what happened in the early 1900's when Congress tried to introduce the idea of central banking yet again?
The public didnt want any part of it.
So it was simply called a different name, the Federal Reserve, and the most powerful bankers in the world (JP Morgan and others) also guaranteed its approval by using their influence to create mass hysteria. They (falsely) announced that many major banks would soon be bankrupt, and encouraged Americans to withdraw their money.
This bank run became a self-fulfilling prophecy, and the mass withdrawals DID in fact wipe out a lot of smaller banks.
After the big bankers had proven their point, even through manipulation, Congress had no trouble getting approval for the Federal Reserve which they said would prevent any future hysteria or bank runs.
The federal reserve is a privately owned bank, outside U.S. jurisdiction, that can do whatever it wants. It prints money, and loans it to the U.S. government, with interest.
Then in 1971, the U.S. government decided to give the federal reserve the ability to print money without needing to have an equal amount of gold in the vaults to back it up. Up until that point, all U.S. dollars printed were required to be backed by an equal amount of gold.
So, every dollar printed since 1971 has been backed by thin air. And the national debt began its 3,381% rise to $14 trillion dollars.
For the first time in OVER 30 YEARS countries and central banks are BUYING GOLD and the demand only continues to rise.
China and India are buying gold like crazy. They consumed 52% of the worlds gold in 2010. And in 2011, increases in demand from China and India have driven a 7.5 percent increase in demand for gold jewellery during the first half of the year, despite a 25 percent increase in the price.
Additionally, a recent cable was leaked by the infamous WikiLeaks website, which revealed the REAL reason behind Chinas increasing demand it showed that Chinas intent is to make major gold purchases for the sole purpose of weakening the U.S. dollar.
You CAN rely on Gold.