GOLD - A BRIEF LOOK BACK IN HISTORY
The precious metal with the very special color was already captivating our ancestors 6,000 years ago. Gold embellished the sovereigns of the time as well as their buildings, and gold was the preferred material for crafting religious items. Therefore, it is among the first metals of the human race to ever be extracted, handled, and even workshiped. In 600 BC, gold eventually established itself as a stable means of payment in the form of coinage, as we recognize it today.
Gold has lost none of its preciousness since – on the contrary. Its rarity and durability, as well as its physical and chemical qualities (and the resulting various possible uses), make gold an essential material in many respects, even in this millennium.
GOLD - FACTS AND FIGURES
Assessments from 2007 indicate that the human race would have extracted around 170,000 tons of gold and siver over the last 6,000 years. What at first sounds like a lot, however, equates purely on a mathematical basis to a cube of pure gold with an edge length of just 20.65 meters.
- A large percentage of this gold is converted into items of jewelry and art.
- 18% is located in the vaults of central banks and other monetary institutes
- 16% is in the form of bars or coins held by investors
The current market for gold amounts to approximately 4,100 tons worldwide every year. A good half of this is needed by the jewelry industry; around 1,640 tons are requested by investors, and more than 450 tons are processed by industry.
“This demand is met by an annual output of approximately 2,800 tons. Thus, the demand for physical gold exceeds possible extraction via minds considerable.”
Through recycling of old gold (approximately 1,600 tons), this imbalance between supply and demand in the future will grow larger.
And more fundamentally: At the current rate of extraction, it will only be possible to mine gold profitably for just under 20 more years! This clearly demonstrates that in the future, gold will become an even rarer and more sought-after material and investment item.
GOLD IS IMMUNE TO INFLATION
Over the years, the majority of us nominally earn more money, but can we afford more as well? Inflation is the magic (taboo) word that has prices for everything we need in our daily lives consistently rising.
The fact is: The national debt is increasing at a rapid pace and to dizzying heights. Even a welathy state such as Germany is so heavily in debt that it must now raise over 35 million Euros just for interest payments.
Over the past few years, the United States of America have actually stood short of national bankruptcy on multiple occasions. What happens then? The states start up the printing presses to be ble to handle the liability. Currency loses value and the individual citizens have less money in their pockets and can buy less as a result.
At this point, we do not wish to fuel fears, but rather bring awareness. The financial and monetary crises of the last few years has distinctly shown many are vulnerable to monetary decisions made by others. Financial security, which we all aspire to, seems fragile to many. the collapse of major financial institutions, state subsidies for banks, or bail out funds hurriedly supplied to states in the Euro Zone were scenarios that many would have relegated to the realm of fairy tales a decade ago.
However, anyone taking a look back in history could have anticipated what would happen. The worldwide economy is based on a financial system that has existed for a good 600 years and has not been considerable developed since.
This system is based upon the notion that consumers, companies, but most notably states, incur debts until they have reached a level then renders amortization unthinkable.
What follows is collapse with hyperinflation and a painful new start as most recently seen prior to the Second World War. The much chided governments are genuinely powerless against this cycle. Contrary to public opinion, they are also not entirely responsible for it either, for this system cannot be altered by governments alone.
“Gold owners – as is often the case in history – were the winners during such crises.”
We cannot reproduce gold randomly like paper money; gold retains its value even if the price of gold fluctuates occasionally. Gold is also, in comparison to money, not dependent on the citizens’ trust in states and institutions.
Gold is simpy gold, and the payment method witht he most stable value in the history of humanity.
Here is an example: In 1998, you could fill up a grocery basket with $20 USD, but inflation has decreased the purchasing power signifcantly.
Gold on the other hand is not only stable, but increases in purchasing power. In 1920, a 1 I KG gold bar was valued at approximately $650 and could purchase an early model Ford vehicle. Today, a 1KG gold bar could purchase a $45,000 vehicle!
Until 2018, many folks simply could not afford to purchase gold. Those who could had concerns about storage and liquidity. Personally, I heard about Karatbars international around 2011, but quickly lost interest as the increments or amounts of gold required to participate were “out of my league” as they say.
In an upcoming blog post, I will introduce you to the concept of “CashGold” by Karatbars, which makes saving gold affordable for anyone! The smallest increment is .1 gram of gold. At the very least, anyone can save gold and hedge against inflation. As of this writing, a tenth of a gram of gold is about $5.
For purist savers, Karatbars continues to offer physical gold bars and coins. However, CashGold is part of a larger vision of Karatbars International, where the concept of gold acquisition to build wealth and financial security is available to the masses.
In the next post, let’s take a look at how Karatbars International got started and how it is developing into a transformational financial ecosystem that you and your family can benefit from for generations to come.