Increasing the amount of money available causes the value of that money to decline relative to other indicators, including foreign currencies. As the value of money declines, many investors seek “safe haven” investments whose value is intrinsic and not directly tied to the value of money.
Gold often tops the list of investments considered safe. For centuries, gold has been a standard bearer of wealth and has been valued by cultures around the world. Since the U.S. Federal Reserve began implementing quantitative easing measures in 2009, gold prices have skyrocketed, prompting many to sell old jewelry and park their money in gold. While the economy has sputtered toward recovery, gold has increased in value exponentially, heartily rewarding investors who purchased it when it was cheaper.
About Steven Zoernack
Steve Zoernack serves as Managing Director of EquityStar Capital Management, an asset management firm in Washington, D.C. In addition to other investments, he has enjoyed success through investments in gold.