Gold as Currency and Safe Haven

One of the more positive results of the economic crisis we face is abn increasing number of people are better understanding the overall scheme of economics, currencies, the central banks, and gold.

Gold prices today have risen to just under record levels, and that alone is good news, not just for gains made by investors, but because it reveals people in general are starting to see that historically gold has been the most durable asset that has existed; going back thousands of years.

But just as important is the understanding that the Federal Reserve and other central banks around the world are a major problem in the health of our economic system, and the endless printing of money by central banks had done as much harm to the global economy as anything else, and probably more.

Another great benefit is people are beginning to see that paper currencies aren't worth much, and gold is far more valuable and safe than it will ever be.

All of this is important because our generation, for the most part, haven't experienced this depth of economic chaos in their lifetimes, and it has brought to the surface the underlying causes which few have taken time to search out. Now they are, and it's doubtful it'll ever return to the naive practices of the past without being challenged.

Gold is safe because it holds its value and can be used as currency at any time, in the sense if things get so bad that the financial system breaks down, which it in reality could. This is why a growing number of people are acquiring physical gold to not only protect their wealth, but to have a means of exchange if things go that sour.

If nothing else, hopefully this crisis will change the understanding of our financial system and help people to see what needs to be changed after decades of Keynesianism has let us to where we are today.

Gold Reaching for $1,200 On Sovereign Debt Crisis

Gold continues to surge upwards as the European sovereign debt crisis takes center stage on the economic scene. Gold prices rose to as high as $1,188.40, a five-month high.

It looks like there's little resistance to reaching $1,200 sometime soon under these conditions, and it'll probably surge up again once it surpasses that marker.

A couple things gold has going for it is it can rise on a weaker euro and rise if the euro strengthens against the dollar.

Investors are now treating gold as the currency of choice, and are trading it as such.

Gold Fighting for Reserve Currency Status

Gold being looked to as Reserve Currency!

There has been a lot of confusion form people commenting on reading stories about gold, as one day a headline will read gold goes up on Greek concerns, and the next day the same headline will be applied to the U.S. dollar.

The reason this is happening and there are paradoxical movements between gold and the U.S. dollar, and the two are the only two currencies in the world being considered as reserve currencies, with gold making a bold upward movement and people feeling better about the consistency and safety of gold than they do about the dollar.

As to why one day gold and the dollar go in the same direction and the next day they go in the usual inverse relationship they normally do, could be a reflection of the uncertainty as to which one will win out in the minds of investors.

Everything at this time as far as economic data is conflicting, and I think that's the same with most commodities and businesses as well.

One day prices of commodities are going up on demand and the next day they're going down on China tightening its money supply; it can't be both. So the uncertainty is written about by writers who for the most part, don't know what is going on, and pretty copy one another in their writing, while putting it into their own words.

While there are many factors related to the price of gold, including inflation, printing more paper money, safety, and geo-political concerns, I think what the Greek sovereign debt problem has unveiled is the inherent weakness in paper money to deal with the types of problems we're facing, and if just tiny Greece can bring this type of response, what would happen if Spain or even a major country defaults on their debt? It seems it would be unfixable, and the European Union and the euro probably wouldn't last (not that it would be a big deal in that sense).

What matters to most people is how this will impact their lives, and gold is the only proven type of currency out there that has been resilient over thousands of years. Silver could be a second one, but that's not solely a currency, although it could step up as one. But gold stands above all currency competitors, and is battling to regain its place as the choice of those looking for a sound and healthy currency.

Citigroup (NYSE:C) Analyst: Gold New Currency

Gold New Reserve Currency

Now that gold has gravitated away from it traditional inverse relationship with the U.S. dollar, it leaves people asking what's happening, and accoring to a Citigroup (NYSE:C) analyst, what's happening is gold is being increasingly considered second reserve currency, alongside the U.S. dollar.

As the public gets more and more educated about the consequences of central banks printing a seemingly endless amount of paper money, they understand it will weaken the currency of the countries doing that, increase inflation, and no longer be safe to count on as the primary means of trade.

While the last one has a way to work out yet, there is a growing unease with what the central banks, bank cartel and governments around the world are doing with their currencies.

According to economist and hedge-fund manager Dennis Gartman, this isn't going to be a temporary situation or fad. "The trend shall continue months, if not years, into the future," said Gartman, referring to gold being considered a reserve currency.

Many already believe gold to be superior to any paper currency, but what's new is a growing number of people are seeing the reality of that and are acquiring gold as a place of safety as a result.

Gold New Reserve Currency