Why Do You Buy Gold?

"Dad, why do you buy gold?"

Kids, sometimes I have a few extra dollars.  Your mother and I manage our household and our businesses so there is something left over at the end of the month.  We don't want to spend it all right now.  We'll spend it later.  Or you'll spend it later.  Or not at all.

Dollars are kind of like fruit.  It's usually better to eat that apple sooner than later.  Dollars, too, are better sooner than later.  They "go bad" over time.  

And it's not just dollars that do this, all paper currencies do.  That's fine.  It doesn't mean paper currencies aren't useful...they are...so is fruit.  In fact, paper money is desirable, it just isn't a good thing to use for savings (more on this another time).  Which is better: a box of 100 year old gold coins or a box of 100 year old apples?

That 100 year mark is important.  100 years is older than most paper currencies survive.  The dollar is bringing up the average but you can see it is rotting...and quickly.  By government estimates one dollar in 1913 bought the same amount of stuff that $23.80 buys today.  How do you like that?  We could buy a new XBox for $10 that your great, great grandpa saved.

I could speculate on other investments but, ultimately, gold is the place for savings.  The most efficient, compact, portable and recognizable and lasting way mom and I can save for later is to buy an ounce of gold.  Gold's job is to protect the work we have done in the past.  At some point we'll hand that to you.  

So, let me ask you.  Do you want gold or rotten apples?