Gold in Circulation is Money in Motion

The Golden Rule: He Who Has the Gold Rules

The U.S. gold inventory is around 8,133 tons. A few notable Western European governments maintain gold reserves as well, like Germany with 3,381 tons, Italy with 2,451 tons, France with 2,435 tons and Switzerland 1 ton. Russia owns 1,447 tons and China reportedly owns 1,788 tons. The International Monetary Fund (IMF) has 2,800 tons.¹ Watch the interview with international investment consultant Michael S. Young as he discusses gold in circulation and money in motion. Michael also contrubuted to this article.

http://rightonthemoneyshow.com/gold-is-real-money-everything-else-is-papier-mache-michael-young/

Gold is bought and sold through the supply and demand by gold brokers and large central banks and traded on the spot and saved for futures markets. It’s a sophisticated market and difficult to track as a regular investor or consumer attempting to understand the risks and rewards of owning gold. But the most difficult dilemma for any consumer is how to use gold as a transaction currency in tough times like the Great Depression era of post-World War I Germany. The German people were carting around wheelbarrows of near worthless German Marks just to shop for basic commodities. The currency was so devalued, some people wallpapered their bathrooms with it. Hyperinflation had gripped Germany by the throat, and it was an economic catastrophe.

Gold for domestic spending is not likely how a consumer will pay for items. Even the smallest bar of bullion will be too much for daily commerce. Perhaps you could buy items in bulk, but in the end, the bullion is not divisible. At a macro level, gold may be required to back the value of global currencies, though, especially when consumer confidence drops in any specific central bank or currency. It’s even uncertain whether you would have access to your gold in a bank vault if the worst economic scenario developed. So think long and hard about owning gold and what you can really do with it before purchasing it for you portfolio.

^{1 International Financial Statistics, April 2016*}