An Ounce of Gold Can Still Buy…

A Look at Gold’s Purchasing Power

 We reported last month about the states that are passing laws to protect the people from the effects of Washington’s inflation.

In short, inflation destroys the purchasing power of a currency like the dollar.  As the government or central bank creates more and more dollars, they buy less and less.  The adjoining chart depicts this loss of dollar purchasing power with rising consumer prices over the decades.  

That is a leading reason to protect yourself with gold and silver.  It is protection from being defrauded by the monetary authorities.  Because they can’t print gold, its ability to protect your purchasing power is legendary.

Florida is among the states that now recognize gold and silver as legal tender.  This important measure passed both the Florida House and Senate unanimously and was signed into law by Governor DeSantis.  

At the bill signing, the legislation’s sponsor, Representative Doug Bankson, offered a powerful example of gold’s purchasing power.  

 “If you bought a home in 1979, the average cost was $75,000; those were the days,” said Rep. Bankson. “If you bought that same home, that same product, now it would be $531,000. However, if you had bought that in gold in 1979, it would’ve been 268 ounces. Today, if you bought that home, 268 ounces. Why? Because it’s a tangible thing that has true value.”

It’s a great example.  For decades people have described gold’s retention of purchasing power in relationship to a new gentleman’s suit which could be purchased for an ounce of gold a century ago.  Today an ounce of gold can buy you a beautiful bespoke suit.

Other examples of the purchasing power preservation of gold and silver during hyperinflations are worth remembering.

It is said that only a few years ago, during the Chavez/Maduro inflation in Venezuela, one could pay off a mortgage with an ounce of gold and feed a family for a month with an ounce of silver.

Here in the US, with already unpayable debt and unrestrained government spending, gold has a long way to climb.  What do we mean?

We mean that since 1980, gold is actually lagging the increase of the US money supply.  Gold is up 294 percent since then, but the US monetary base has grown by 3,578 percent.

In other words, as the effects of this monetary expansion become more widely known, and the trillions of already created fiat dollars in the Fed’s hand continue to work their way into the consumer economy, gold will have some catching up to do.

Learn more about purchasing power protection by speaking with a Republic Monetary Exchange gold and silver professional.  You’ll be glad you did!