Maintaining Purchasing Power with Gold

In a world where fiat currencies are constantly devalued, gold stands out as a reliable way to preserve purchasing power over time. Unlike holding onto cash, which loses value due to inflation, gold has historically maintained its worth, offering a hedge against the erosion of wealth.

The Case of the High-End Suit: A Century of Stability

To illustrate gold’s ability to preserve purchasing power, let’s take a practical example: the cost of a high-end men’s suit.

• In 1900: The average price of a high-end men’s suit was about $35. At the time, the price of gold was set at $20.67 per ounce, meaning the suit cost approximately 1.7 ounces of gold.
• Today: The average price of a high-end men’s suit is around $2,000. With gold priced at approximately $1,800 per ounce, that same suit now costs a little over 1.1 ounces of gold.

What’s striking is that while the price of a suit in dollars has skyrocketed by 5,614.3% over the past century, the price in gold has actually decreased by about 35%. This decline reflects improvements in technology and productivity, but more importantly, it shows that gold has not only maintained but slightly increased its purchasing power over time.

The Erosion of Dollar Value

Now, consider what would have happened if you had kept $41.34 (the equivalent of 1.7 ounces of gold in 1900) under your mattress. Today, that cash might buy you a couple of Polo shirts at best. However, if you had instead bought two 1-ounce gold coins and stored them, you could afford a high-end suit today and still have around $1,600 left over.

This comparison vividly demonstrates how fiat currencies lose value over time, while gold remains a stable store of wealth. Even though the price of gold fluctuates in the short term, its long-term ability to maintain purchasing power is unmatched.

Why Gold Matters in Your Portfolio

Gold’s ability to preserve wealth makes it an essential component of a diversified investment portfolio. It not only hedges against inflation but also carries no counterparty risk, meaning its value isn’t dependent on the performance of any institution or government. In times of economic uncertainty, gold offers a safe haven for investors looking to protect their assets. Here you can read about the most affordable ways to invest in gold.

Invest in Gold with SmartT

As you consider ways to maintain your purchasing power and secure your financial future, investing in gold is a strategy worth exploring. With SmartT, you can seamlessly invest in gold, taking advantage of expert insights and a user-friendly platform to build a resilient portfolio. Don’t let your wealth erode—register with SmartT today and start investing in gold to safeguard your purchasing power for the years to come.