Gold and Inflation:

As a Financial Consultant with more than 20+ years experience I can tell you that inflation is a double edged sword. First, let's look at the pros:

If I buy a house for $200,000 and inflation is 10%, it makes my mortgage of $200,000 feel like $100,000 in less than 7.2 years. Thus debtors benefit as long as they have a fixed rate of interest that is less than the rate of inflation...(Please see my calculators at http://www.drocktonmortgage1.com). The same thing holds true for other debt on a fixed rate.

Inflation adversely effects the stock and bond market but will positively influence the foreign currency market and lead to dramatic gains in gold and silver (click here to learn more).

In fact, gold has averaged close to 30% return over the past 7 years and is great for IRA rollovers! When one horse is dying another is finding new life.

Money can also be made in the futures market in any commodity (gold, gold options, gold futures, oil, gas, wheat etc.,) during an inflationary cycle.

Now for the down-side:

Inflation will kill your 401K, State Retirement Plan, bonds, savings bonds and any other cash investments because it forces interest rates to go higher. New bonds are in competition with the existing ones that pay a lower rate of interest in your portfolio. Thus, higher paying bonds cause yours to loose value. Again, you are better off with gold bullion or gold bullion coins.

Wages rarely keep up with inflation and most people are not sophisticated enough financially to reap the benefits. Thus, 99% will be on the losing end. Among these are Farmers that are selling into the futures markets at a guaranteed price, builders that sell at a fixed price or anyone else that cannot provide immediate delivery of a product or service. On the other hand gold options and gold futures are a great hedge against inflation no matter what you produce.

As production costs increase, it cuts into profits and leads to cost-cutting at the expense of the consumer who is very "price sensitive" but not necessarily "quality sensitive". Thus the weakening dollar continues to lose purchasing power. Saving gold makes far more sense than saving dollars.

Inflation is a double edged sword. As long as you know which side will cut you, you can actually benefit from it. Sadly, though, the average individual will never realize those benefits with variable rates on their consumer debt; food and housing expenses; transportation costs; etc...

Gold is the logical hedge against inflation:

Small investors can purchase 1/10 of an ounce gold bullion coins. Every working family in America should be setting aside 10-15% of their income as savings. If everyone did this, it would play a positive role in financially stabilizing the family. With 70% of divorces resulting from financial stress, gold would also help stabilize relationships.

Since divorce has such a huge impact and cost to society at large, it would be in everybody's best interests to promote saving gold. To be effective, savings and investments need to be taught at the high-school level. A Mandatory section on buying gold should also be included.

For those not willing to wait on the politicians, some families have found that setting aside some time, one day a week, can be very beneficial for teachings about gold and other investments. Discussing family finances before they reach crisis levels could play a major role in preserving our families. Planning for crisis through saving gold and gold bullion coins should be an important part of that training.

Retirement plans should include a mandatory precious metals component for those that desire to invest in gold. Not in gold mines or gold resellers, but actual investment in the metal itself.

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Gold Bullion Coins:

Gold Bullion Coins are coins that are produced as actual currency by the United States or another Government. They usually have a nominal face value (for example: the one ounce, United States Gold Eagle has a $50 face value). Of course, no government sells at the face value. Instead they sell Gold Bullion Coins for the market value of the gold plus a nominal premium for making the coin.

Gold Bullion Coins are usually available in in 1 ounce, 1/2 ounce, 1/4 ounce and 1/10 ounce. It is less expensive to buy a 1 ounce coin than two 1/2 ounce coins because you pay "manufacturing costs on two gold coins instead of just one. The same holds true for even smaller denominations. It is cheaper to purchase a 1/2 ounce than two 1/4 ounce gold coins etc.

Liquidity is the other side of the equation. It is easier to liquidate (sell) a 1/2 ounce gold coin than a 1 ounce coin. It is also easier to liquidate a 1/10 ounce coin than a 1/4 ounce coin. However, right now, and in the forseeable future, gold is far more liquid than any other asset regardless of the denomination and size.

American Eagle Gold Coins:

1. American Gold Eagle Coins are 95% pure gold. Although each coin has the stated amount of gold (IE: 1 ounce) it also contains copper to "harden" the coin and make it less scratch resistant. This in no way detracts from the coin's value. In fact, it can be seen as a positive for investors because the Gold Eagle is more resistant to scratching and other defacements that could effect its value.

2. Gold Eagles were available through the United States Mint, which manufactured them. However, due to excessive demand, the Mint's availability is sporadic at best. Most gold bullion coins are therefore, supplied by the secondary market.

3. Because the Gold Content is guaranteed and backed by the Good Faith and Credit of the United States government, gold eagles are extremely liquid and do not require a certificate or asayer to prove value.

4. American Eagles can be purchased here: or through a reputable gold bullion dealer, or coin dealer such as those that are listed in the Google ads on this site.

5. Gold Eagles have a nominal face value (IE $50 on the 1 ounce coin). This means you can spend them at anywhere that American Currency is accepted. This means it would be highly advisable to keep them away from family members and friends that would spend them as cash. As the coin is really worth almost 20 times face value for its gold content, spending it for groceries is enough to make any grown man or woman cry.

It is recommended that you store gold bullion coins in a protective plastic sleeve. If buying them in a larger quantity is desired, they will often be packaged in rolls of 10 (1 ounce Coins). It is important that the coins are not scratched or defaced as this will effect their retail value.

Gold Storage options include home safes, bank safety deposit boxes or even bank vaults. The option you choose should depend on the quantity of gold you have on hand.

Large quanties of gold require greater security. Most individuals don't have the availability to provide this type of security in a home setting.

Mid-size quantities and smaller quantities can be divided up between home storage and a bank safety deposit box. As I mentioned in a previous article, "loose lips sink ships".

So, the best home storage place is one that only you will find and/or know about. If you use a bank safety deposit box to store your gold, remember, access to the key is access to the gold. Make sure you store the key with the same care you would store the gold.

This means, don't carry it around on your key-chain. Any criminal worth his weight in salt knows what a safety deposit box key looks like. With a few sophisticated friends they could easily plunder your gold stash before you even know its gone.

Get Paul A Drockton's Gold Course Here!

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