Demise of the Dollar: Rush to Gold is Here       

Over the course of history, we have read about the rise and fall of empires and the transition from one era to another. Today, we see more of things like the dollar unfold before our very eyes.

The Dollar

Dollar, whenever mentioned, most often than not, the concepts supremacy, wealth, gold and the like are the first things that come to our mind. The US dollar occupied the dominant spot the world over as the global reserve currency.

Its strength lies in the fact that gold backs it. Literally yes, every dollar had an equivalent gold. The United States of America had the most significant gold reserves. This makes the US the most powerful nation early in the 2oth Century.

This hadn’t changed for about a century until the Federal Reserve started to print money without gold reserves to back it in the late 1940’s.

Then came the inflation which prompted the start of a vicious cycle of printing more and more money without the equivalent gold reserves compounding the problem.

This then led to the upsurge of the market value of gold thereby reaching the point that the US currency stopped being backed by gold. Gold price tripled, a scenario inversely proportional to the rapid drop in dollar value.

Global Currency Reset

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Global currency reset became the new reality, the birth of the petrodollar, a somewhat political move.

In the past, the US was the most prominent importer of oil from Saudi Arabia, which allowed them to politically have the price of oil based on the US dollar.

This necessitated all other countries to comply.

However, rapid turn of events did happen when Russia took over the limelight when it replaced Saudi Arabia as the major oil producer globally by 2017.

Together with this, China had replaced the spot of the US as it became the most prominent importer of oil recently as well.

The players of the oil market have changed, so much that they wanted to have the Yuan to back the price of oil.

As the dollar supremacy fades in the scene, the Yuan, on the other hand, is promising.

Over the years, China and Russia have been buying gold and now decided to use it to back the Yuan.

This is a game changer. Other countries are set to reconsider as the dollar had gained $123 trillion in debt rather than gold reserves.

Many other nations have followed the game plan of Russia and China.

In fact, European countries such as Hungary and Germany had fortified their gold reserves. Others followed soon, creating a hundredfold rippling effect in a global context.

Indeed, this is the most profound financial change. Today, in the oil market, the dollar is joined by a basket of currencies including euro and the yen.

The dollar is slowly losing its global position in contrast to the gold becoming more significant in the global market more than ever.

This is “gold rush” in a different perspective.

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How Cryptocurrency Plans Entice Investors Back to Gold

Gold is best-known for its universal value. Time and again, various nations sought the help of gold when times were tough. For instance, if there is currency devaluation in a particular country, the government would turn to gold for their alternative IOU for the time being.

For many years, people had considered gold as one of the most desired investment assets in their portfolios due to its relatively high intrinsic value. However, since the emergence of cryptocurrencies, gold had been held in the hot seat.

Since then, people had been questioning whether gold is still the best form of investment in the market. For quite some time, metal enthusiasts had stayed loyal to their path, but ever since the price of gold has stagnated, many people started to cling to cryptocurrencies.

The demand for precious metals may have risen, but so did the supply. In that sense, when the supply is up, the value of the asset can potentially go down or stagnate.

Meanwhile, Bitcoin as a cryptocurrency with limited supply can potentially increase in value in the next five years or so.

The year 2017 ended with many people thinking that gold and cryptocurrencies can only become rivals. But now, we see that these two assets can potentially work together to create a better investment opportunity for everyone.

Perth Mint to Utilize Cryptocurrency to Put the Spotlight Back to Gold

Perth Mint, Australia’s biggest refiner, has decided to develop its cryptocurrency that is backed by gold.

This genius plan is directed at giving customers ease in buying gold by integrating blockchain technology into its system.

As you are aware, Bitcoin technology focuses on creating a public ledger for its users. Perth Mint had stated that it intends to use the same technique. However,  this time the strategy will focus on gold purchases.

Since the inception of the blockchain technology, people had used Bitcoin as a channel to enhance and broaden the usage of various sectors such as agriculture and land registration.

With that, Perth Mint Chief Executive Richard Hayes is convinced that it can take advantage of Bitcoin and use it to bring back investors’ attention to gold and other precious metals.

Hayes believes that the primary reason more and more people are clinging to Bitcoin, and other cryptocurrencies are that in this time of modern technology, individuals are looking for alternative offerings outside the traditional methods.

However, Hayes saw a flaw in the cryptocurrency system. Despite the new and secure method of transactions, digital coins remain to be a volatile investment.

Meanwhile, by creating a new cryptocurrency that can work hand in hand with gold, people may just find the solution to their worries.

Cryptocurrencies may be producing a lot of money for some people. But many people will still see it as a risky business.

By creating a cryptocurrency that precious metal can back, people won’t see cryptocurrency as an obscure investment. What they will see is the gold that is supporting it. In that sense, cryptocurrency and gold work for each other, instead of against each other.

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Top 2 Reasons Why You Should Invest in Gold

Because gold has a recognized value worldwide, it had been used as a universal currency dating back to the Byzantine Empire.

However, upon the signing of the Bretton Woods Agreement back in 1944, the US dollar has replaced the gold in being a universal currency. But that didn’t stop gold from being a valued asset. It may have ceased to be a currency but not a store of wealth. However, many developing countries still used it as a backer to their devaluing currencies. Many years have passed, and gold still remains a priceless treasure.

When Richard Nixon removed the gold standard in 1971, other countries followed suit. It may have been erased from the memories of many people, but even when it was no longer a currency, it retained its value by being an excellent investment form.

With the rise of new investment instruments, some people would ask if in today’s modern era, is gold still considered a valuable investment? There are lots of reasons why gold makes for a significant investment. Two reasons are:

1. An Excellent Getaway from The Paper Currency Experiment

The fiat currency which we have all believed to be the ultimate form of money is only an IOU. Meaning to say that it is a representation of a particular credit that countries are issuing. The paper money phenomenon first started out as an experiment. Eventually, when society became more accepting of paper money as the standard of financial systems, many government units have lost control of the economy. And, thus, they resorted to printing massive amounts of money. This, in turn, resulted in hyperinflation.

Hyperinflation has happened time and again in the past. For some people, it may be best to leave the past behind. However, you can’t ignore the saying “history repeats itself.” With that in mind, one factor that makes gold an excellent investment is that it can serve as a replacement for fiat currency.

People may refuse to accept paper money as payment if your currency has been devalued. However, they will always take gold because it is the single asset that has value all over the world.

2. The Relationship of the US Dollar and Gold

There is no denying that the US dollar is the leading currency worldwide. However, just like other fiat currencies, the US dollar also tends to fluctuate through ups and downs.

There is an intriguing association between the US dollar and gold. When the dollar is at a high value, gold appears to be heading towards that direction. However, when gold is purchased at favorable prices, the dollar also goes up in value. Meanwhile, when the dollar has low value, the price of gold tends to go up.

The US dollar is currently at an all-time high. But instead of waiting for a currency fluctuation, you’d rather start investing in gold. That way, when the dollar swoops in value, you will have an excellent exchange for gold.

To Buy or Not to Buy

The main goal of investments is to increase and protect one’s wealth. The topics discussed above cover the primary reasons why gold is people’s go-to when it comes to financial problems.