To fully appreciate why 8,000 years of experience say gold is forever, we should review why the world reveres what England’s most famous economist, John Maynard Keynes, cynically called the “barbarous relic.”
Why gold is “good as gold” is an intriguing question. Dr. Sigmund Freud, the founder of psychoanalysis, suggested that “our fascination with gold is related to the erotic fantasies of early childhood.” However, we think that the more pragmatic ancient Egyptians were perhaps more accurate in observing that gold’s value was a function of its pleasing physical characteristics and its scarcity.
Gold is a precious metal known to human race for a long period of time. It has always dominated all the other metals in its beauty, purity and elegance.
The basis for the precious nature of gold is found in nature itself. Gold is a fairly difficult but not impossible resource to find. That allows it to have more value. Gold is more like a liquid asset like currency for majority of the countries in the world. The simple answer is that gold is the appropriate precious metal of its kind that will not disintegrate, deteriorate, or cause any potential safety threat for the owner.
Gold is being mined at about 2,600 tonnes a year, the ground supply is expanding at 1.6% per annum. This newly mined supply means the world’s cube of gold – currently 20.2 meters across – is growing by just 11 cm per year.
• Number one choice for investment in terms of return as well as security
• Asset value increases.
• Gold keeps an edge and advantage over national currencies over time.
• Gold has its unique existence across the globe and is not affected by any political systems, any specific government policy or set of policies
• Gold always possesses tangible value, while goods and services diminish in value over time in relation to gold
• Gold is one of the ultimate measure of time and value as these can be related to capital, wealth and human labor.
• Easy to store and transport
• Demand always goes high
• Gold provides individuals with a choice between debt-backed currencies and natural, international money
• Easily convertible to cash as and when required.
Gold doesn’t corrode and can be melted over a flame, making it easy to work with and stamp as a coin or can be molded to form bars. Finally, gold has a unique and beautiful color, unlike other elements. The atoms in gold are heavier and the electrons move faster, creating absorption of some light.
If we look at gold from an elemental perspective, we see that it is one of the most logical medium of exchange for goods and services. Gold is available in abundance to create bars and coins, but rare enough that everyone cannot afford to make it. As gold, does not integrate or corrode, it has good and sustainable store of value. Another aspect which adds value is the human tendency to get physically attracted to the look and feel of the gold.