WHAY GOLD?

Gold is currenncy.It is currency that evolved in the market place over the last 5000 years.

Gold was the main currency in most of Europe, Asia and the America for more than thousend years ago, till 1971. Gold evolved independently as money in the world's main civilization. Apart from being rare, about 5 part per billion of the earth's crust, it is also difficult and expensive to mine.

Gold is the only currencies not created and controlled by governments.
Today government currencies are 'fiat' currencies. A fiat currencies is defined and created by government, and it's brought into existence by government decree while the value of gold is independent of any government laws. Unlike fiat currencies, gold is accepted as valuable without needing by laws.

Gold treats everyone equally, unlike fiat currency, no one can conjure gold up out of thin air to spend for themselves and get others to do their bidding. Gold has to be mined, ounce by hard-won ounce. It is because the supply of gold can only increase slowly. Prices in terms of gold tend to stay approximately constant for centuries and its changing mainly due to technological influences that make some goods relatively easier or harder to make.

The creation rate of fiat currency accelerated significantly, leading to today's worldwide bubble in asset prices.
The world's main currency and the currency used for most international transactions is the US dollar. Vast amounts of US dollar are used outside of United State. Most countries hold US dollar as their main reserve currency and the health of world's economy now depends on the US dollar.

In the pain of the post-bubble peroid, governments will come under pressure to return to backing their currencies with gold. The world would one-day rely on gold to be its sole medium of exchange. Currencies would no longer float against one another, therefore foreign currency exchanges, currency risk, currency hedging, and currency speculation would disappear. The nation's industries would no longer risk losing their export markets because of fluctuations on the foreign exchange markets. The finance industry would lose a large source of easy income but everyone else would benefit.

(Addapted from www.gold-eagle.com)

Jamil Mohamad
PG009748
tel: 0124588405