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Gold vs Dollar – What a knock out!

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You need not look for much more evidence than this chart below showing Gold vs Dollar, to see how paper fiat currencies erode your wealth overtime while assets with intrinsic value such as gold and silver do an outstanding job of wealth preservation.

This chart shows how an amount of gold worth $100,000 in 1932 is now worth $4.4 Million today. While $100,000 USD held for the same period of time is now only worth $2,000! The dollar has lost 98% of its value since 1932 and dollar’s value is quickly eroding, even now.

[Update 4/14/2010]

A reader asked for further clarification on this chart. Okay, if you had a $100,000 US dollars in 1932 and stuck it under your mattress, buried it in your backyard, or whatever makes sense to you, and then tried to spend in today’s economy it would not carry you very far. Let’s look at what things cost in 1932 to help put this in real terms.

How Much things cost in 1932
Average Cost of new house $6,510.00
Average wages per year $1,650.00
Cost of a gallon of Gas 10 cents
Average Cost for house rent $18.00 per month
A loaf of Bread 7 cents
New Car Average Price $610.00
src- The People History

How Much things cost in 2009
Average Cost of new house $233,000.00
Average wages per year $39,000.00
Cost of a gallon of Gas $2.50-$3.00
Average Cost for house rent $800.00 per month
A loaf of Bread $2.50
New Car Average Price $28,400+
src- google.com

If you factor in expenses such as energy cost, tuition, medical cost, it’s easy to see that $100,000 today does not buy very much in todays economy, although it would have bought plenty in 1932. For example you could buy 15 new homes in 1932, but today you could not even buy 1! For real inflation stats, check out shadowstats.com

There are several ways to protect your wealth by purchasing physical gold and/or silver. However, there are only a few ways to store and buy gold and silver securely and safely.  One of the best ways is through GoldMoney.com.  This well-run company is highly respected and recommended by industry veterans in the gold & silver investment community and I use as well.  Also see my review on Anglo Far East Bullion for one of the securest, oldest, securest bullion storage facilities in the world.

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