What The Price of Gold is Telling Us – By Dr. Ron Paul

One of the characteristics of commodity money– one that originated naturally in the marketplace– is that it must serve as a store of value. Gold and silver meet that test– paper does not. Because of this profound difference, the incentive and wisdom of holding emergency funds in the form of gold becomes attractive when the official currency is being devalued. It’s more attractive than trying to save wealth in the form of a fiat currency, even when earning some nominal interest. The lack of earned interest on gold is not a problem once people realize the purchasing power of their currency is declining faster than the interest rates they might earn. The purchasing power of gold can rise even faster than increases in the cost of living.

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