With the current state of the economy, some people are predicting that an economic collapse is imminent. Their views can be seen as rather alarmist, but there are also some historical trends that correspond with these thoughts. The question that many people have on their minds is whether people will use gold after an economic collapse.
Gold has been used as a standard of currency for thousands of years. Gold is often selected as a form of money because it is durable, rare, able to be divided, and easily identifiable. The United States stopped using the gold standard in 1933, following the lead of countries such as Britain. Later analysis revealed that how early a country abandoned the gold standard predicted when it would recover from the Great Depression.
Some of the people predicting a coming economic collapse feel that the Federal Reserve is attempting to confiscate gold before the collapse occurs. They believe that the Fed and other banks worldwide have raised the gold price and are now encouraging people to sell their gold in exchange for record profits. The Fed is exchanging the precious gold for worthless paper money and will then melt down the gold and stockpile it.
These people believe that once the Fed has all the gold, it will devalue the dollar and will then switch to another form of currency. This new currency will be backed partially by gold. Gold will then find its natural value in the marketplace and the economic collapse will be rectified. Others feel that the new standard of currency may in fact be gold itself, so they plan to hold on to their gold supply.
Whatever the case, the decision to buy gold coins or gold ETF funds at this time can be profitable. The price of gold is high, but it is still rising, so investors can still make a profit if they choose to sell at a later date. Others may want to hold onto their gold in hopes that it will serve as the new basis for currency after an economic meltdown.