What you are able to obtain with what you have is termed as ‘purchasing power’ it represents the amount of goods and services you can buy with a currency. To preserve this purchasing power that you wield with the money you have currently requires you to hold on to a currency that does not lose value over time. For example take the money you have saved over time and take the value of your first deposit into this saving account and the last deposit into this savings account and compare it with the purchasing power the first deposit had when you deposited it and the compare that same amount to what it is able to purchase today.

Is it the same? Surely you have lost the purchasing power. This is due to the fact that the value of paper currency has been on a continual decline over the past 60 years without fail. What you should do to preserve your purchasing power is to hold currency that retains its value over long periods of time and you should also hold on to currency that is appreciating relative to most, if not all other currencies in both the short and medium-term, and according to gold traders, most people trade in their gold when the price is high, one major Gold Buyer recently quoted that this activity picks up when gold prices are soaring.

According to history buying gold and buying silver is an excellent way of preserving purchasing power over any period of time and social environment. This fact can be seen in the purchasing power of gold and silver relatively in an easy manner. The value of a barrel of crude oil in terms of gold was 20 ounces about five decades ago (20 ounces of gold allowed you to purchase one barrel of crude oil) Currently it takes 19 ounce of gold to purchase a barrel of crude oil. This benchmark actually tells us that Gold actually had increased its purchasing power.

This is in stark contrast to national currencies which are also referred to as fiat currencies, like the US dollar, which has lost its tangibility over the past 100 years by a huge gap. Central banks and governments have set a long-term trend of currency debasement, and it is unlikely that this trend will be reversed anytime soon. Gold and silver are the only globally recognized currencies that cannot be created out of thin air, which makes both of them great stores of value.

One prominent gold trader went as far as to comment “[gold bullion] will never lose value but on the contrary will only increase, as the demand for gold by the growing global population will dramatically exceed the total new supply of gold”.