GOLD vs. PAPER MONEY: historical facts why gold takes the lead
With the abolition of the gold standard, only paper money remains. But it is widely known that in times of crisis, it is hardly to be trusted despite what governments say.
Find in this article the most astonishing facts about gold and paper money.
Countries all over the world are increasing the amount of paper money uncontrollably, and the USA takes the lead. The dollar, being one of the world's main currencies, enjoys certain privileges.
But, how does the overproduction of paper money affects the economy? Observe the following examples:
How hyperinflation destroyed entire economies
Germany, 1920s. The national inflation rate was about 25% per day: every three days, prices would double. In a matter of a month, they increased by 800 times. Prices tags in stores would change several times a day too, and salaries had to be paid daily.
Hungary experienced a similar situation in the middle of the 20th century, and even set a world record: at the peak of hyperinflation, the largest banknote was a sextillion or a billion trillion (in pengő, an old Hungarian currency).
However, the most impressive example of contemporary hyperinflation is Zimbabwe. As a result of a catastrophic depreciation of the local currency, inflation grew by hundreds of thousands in percentage since the beginning of 2000. This situation led Zimbabwe to occupy one of the first positions in the world's ranking of the poorest countries.
Gold in a world of crises and hyperinflation
When having a look at gold prices graphs, gold shows an outstanding performance while economic bubbles burst, corporate giants go bankrupt, and world's main economies suffer from the overproduction of banknotes.
Those who managed to create a financial support by means of gold not only protected their money, but also increased it: gold prices have increased by more than 300% over the last 10 years. That is to say, from a price of $300 to more than $1,200.
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