Gold Prices Moving Up

Gold Key, weighing one kilogram is used to access a ten digit account number which is known only to the bearer of the Gold Key. (Photo credit: Wikipedia)

Gold Price History - Karatbars from Chuck Thompson

Gold prices are trending upward ever so slowly but yet in a steady pace.  Above is the most recent ask and buy back prices per gram for each of its one gram gold cards from Karatbars.  Karatbars is a German company looking to make their gold cards a form of legal tender throughout the world.  Many networks are already in place for accepting exchanges on these gold cards and anyone with a brick and mortar store front can accept them now in any country that wants to.  One just needs to setup a free account and fill in all the questions online for approval.

  What is interesting to note is that gold has not changed its value throughout history.  Its money that has devalued creating the illusion of gold increasing in value against dollars and other currencies and forms of exchange.  What truly makes gold an exchange of value?  Nothing beyond the fact that it does not break down like other metals.  Steel will corrode.  Iron corrodes.  Copper will eventually disintegrate.  Brass eventually disintegrates.  Silver, gold and platinum do not disintegrate.  This is why they were picked for mediums of exchange.

  Initially gold was used more as ornamentation and decorative purposes and had no other value beyond that.  Technically speaking lead is worth more per ounce than gold depending on what it is used for.  Lead being more readily available than gold, it makes for creating great bullets to form a defense.  Who is going to use gold bullets for defense?  Who in their right mind will throw gold at a thief as a form of defense?  The thief will want to know how much more gold you have.  Send one lead bullet his way and see how long he will stay around to see how much more lead you have.

  If the world goes to hell tomorrow I want lead bullets not gold.  Who has a gold bomb?  Again, gold's only value is in its ability to not corrode or disintegrate into nothing.  There is where the only true value of gold exists.  Why people want to own gold and silver.  They are well proven mediums of exchange because the monetary value does not disintegrate into dust over time.  If you are interested in more information on gold ownership you can go to our righthand sidebar and click the link for Karatbars.  You can sign up for a free account through our link and also sign up to accept karatbars in your business if you so wish.  You can own the actual cards and keep them with you or you can maintain free storage in their place of origin in Germany if you want.   Paper money continues to devalue while gold maintains its value.  You decide what makes more sense.  

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Gloucester, VA Economics - The Bretton Woods System

Campaign poster showing William McKinley holding U.S. flag and standing on gold coin “sound money”, held up by group of men, in front of ships "commerce" and factories “civilization”. (Photo credit: Wikipedia)

From U.S. Department of State
Nations attempted to revive the gold standard following World War I, but it collapsed entirely during the Great Depression of the 1930s. Some economists said adherence to the gold standard had prevented monetary authorities from expanding the money supply rapidly enough to revive economic activity. In any event, representatives of most of the world's leading nations met at Bretton Woods, New Hampshire, in 1944 to create a new international monetary system. Because the United States at the time accounted for over half of the world's manufacturing capacity and held most of the world's gold, the leaders decided to tie world currencies to the dollar, which, in turn, they agreed should be convertible into gold at $35 per ounce.

Under the Bretton Woods system, central banks of countries other than the United Stateswere given the task of maintaining fixed exchange rates between their currencies and the dollar. They did this by intervening in foreign exchange markets. If a country's currency was too high relative to the dollar, its central bank would sell its currency in exchange for dollars, driving down the value of its currency. Conversely, if the value of a country's money was too low, the country would buy its own currency, thereby driving up the price.

The Bretton Woods system lasted until 1971. By that time, inflation in the United States and a growing American trade deficit were undermining the value of the dollar. Americans urgedGermany and Japan, both of which had favorable payments balances, to appreciate their currencies. But those nations were reluctant to take that step, since raising the value of their currencies would increases prices for their goods and hurt their exports. Finally, the United States abandoned the fixed value of the dollar and allowed it to "float" -- that is, to fluctuate against other currencies. The dollar promptly fell. World leaders sought to revive the Bretton Woods system with the so-called Smithsonian Agreement in 1971, but the effort failed. By 1973, the United States and other nations agreed to allow exchange rates to float.

Economists call the resulting system a "managed float regime," meaning that even thoughexchange rates for most currencies float, central banks still intervene to prevent sharp changes. As in 1971, countries with large trade surpluses often sell their own currencies in an effort to prevent them from appreciating (and thereby hurting exports). By the same token, countries with large deficits often buy their own currencies in order to prevent depreciation , which raises domestic prices. But there are limits to what can be accomplished through intervention, especially for countries with large trade deficits. Eventually, a country that intervenes to support its currency may deplete its international reserves, making it unable to continue buttressing the currency and potentially leaving it unable to meet its international obligations.

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