Throughout the last century, world governments systematically got rid of the gold standard that backed their currencies. The U.S. government did it in the 1970s under President Richard Nixon. But now some economists are saying a new gold standard is the wave of the future. If they are right, it is yet one more reason to consider gold investing.

Thanks to federal legislation passed in the 1990s, the average American can open a gold backed IRA as an investment for their retirement years. Many investors now use gold to round out their portfolios with added stability. If the U.S. were to return to a gold standard, a gold IRA would be even better.

Benefits of a Gold Standard

The benefits of a gold standard are widely accepted by economists of all stripes. When currency is tied to gold using a standard measurement, it takes away the ability of a government to manipulate an economy by manipulating the money supply. It works because the standard defines how much money a government can mint. This allows free markets to determine the course of an economy.

If the world were to return to a gold standard, one of the likely results would be an immediate rise in the price of gold. This rise would eventually level off, but it would mean immediate profitability for investors who already have gold in their portfolios. If economists predicting a new gold standard are correct, now is the time to begin investing in a gold IRA.

Disadvantages of a Gold Standard

The disadvantages of a gold standard are, largely, only applicable to government. A good way to understand this is to understand why the gold standard was abolished in the first place. When our government did so it was a decision based on the Nixon administration’s desire to control money supply and, thus, control the direction of the economy. The gold standard is a disadvantage inasmuch as it takes economic control away from government.

Assuming the predictions of a new gold standard never come to fruition, the value of gold will still be impacted. How so? It will be impacted by what happens to the U.S. dollar in relation to it being the world’s reserve currency.

Right now China is buying up gold like never before in anticipation of the U.S. dollar no longer being accepted as the world’s reserve currency. When that happens – and it may be within the next decade – China is hoping that its currency becomes the new reserve. Accumulating gold in anticipation of that possibility is China’s way of increasing gold’s value for the benefit of the Chinese economy.

countries buying up gold

Whether you agree with the Chinese are not, their strategy is a very sound one. It is a strategy that clearly illustrates gold investing is a wise idea for not only governments and central banks, but also for individual investors as well.

Whether a new gold standard is the wave of the future or not, a gold IRA is one of the safest investments you can make in your future. What’s more, it is fairly easy to do. You can start a new gold IRA by working with a custodian and making your first contribution in cash.

Another option is to use an existing IRA to fund your new gold IRA. This is accomplished through either a gold IRA rollover or transfer. Your current IRA custodian can explain to you how it all works. Either way, you can rest assured that gold investing is smart investing.