Back in prehistoric times it’s assumed that people bartered for what they wanted, if they couldn’t find whatever they needed in their immediate surroundings. For example, you couldtrade a venison steak for five arrowheads, or a basket of blueberries for a bearskin. But this approach had obvious limitations, especially if you wanted to trade with someone who didn’t have anything that you needed. Around the time that cities first developed, about five thousand years ago, money evolved from clay tokens sealed in pouches to coins minted with precious metals. It wasn’t long after that people began using gold and silver as currency. The first gold coins were minted in Lydia around 700 BC, making trading goods even easier because costs could be standardized around a material that everyone recognized as valuable.
Gold and silver are still considered the standards when it comes to maintaining value, not subject to the inflation that other forms of currency are. Zimbabwe recently experienced hyperinflation so extreme that many economists claimed that it couldn’t be measured. This problem isn’t limited to third world countries, either – in the 1920s the mark in Germany became so devalued that people were using it to wallpaper their homes. Part of the reason for these rapid declines in value is that way that currency is tied to the performance of its country, almost like it was a stock.
Every currency in the world today is what’s called a “fiat” currency. That means that the only thing backing up the value of the paper except the “full faith” of the issuing government. When that government is shown to be unstable for various reasons, or when money supply grows larger than the demand, its “price” goes down. That’s inflation, and if you’re interested in protecting your assets from its ravages, visit Guildhall Wealth Management, which has been helping it clients make investments in precious metals since 2002. Because gold and silver bullion remain valuable even when times are uncertain, they act as a dependable hedge during inflation. According to the financial experts at Guildhall Wealth Management, the only way to ensure that your assets are protected is by making precious metals a major part of your portfolio.
The prices of gold and silver are considered“negatively correlated,” which means that when the stock and bond markets go down, they go up. And it’s not just economic uncertainty that you’re protecting against: political uncertainty has the same potential to drive up the prices of gold and silver. Both metals also have major industrial applications which are guaranteed to keep the prices high even when times are good, which is another reason to call Guildhall Wealth Management and inquire about their services in regards to your portfolio. Because of silver’s ability to function as a “premium conductor” of electricity, it is actually considered currently undervalued, so now is the perfect time to buy in – before the next downturn or technological innovation makes you wish you had acted sooner!
from http://monalisaofblogging.com/defend-your-portfolio-with-precious-metals
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