Physical gold is one of the best ways to protect your wealth from any economic downturn. The reason for this is gold has a track record that spans well over five thousand years of holding wealth. Gold has the property of holding and storing wealth because it takes desired work to mine more gold. Desired work is, in essence wealth. The reason why any good or service has any perceived value is the desired work that it takes to produce, cultivate or perform that good or service. Fiat currency and anything that is backed up by fiat currency is subjected to government and central banking policies to keep and hold wealth. Since fiat currency can be created independent of desired work, usually more fiat currency will be created than the production of goods and services. When more fiat currency is created than the production of goods and services it causes inflation.

Gold being a good that takes desired work to mine has a limit on how much that can be produce at any given time. Also if more gold is produce at a given time than the growth of other goods and services, the price of gold will fall and less gold will be produce. If less gold is produce than the growth of other goods and services the opposite will happen, keeping gold’s relative value stable. Fiat currency doesn’t keep its purchasing power for long compared to gold and other precious metals, in fact history has shown that once a government unties its currency from any physical asset the currency becomes worthless in less than one hundred years.

With physical gold your wealth is not subjected to government and central banking policies, barring an all-out governmental theft of gold. If the main reason for investing in physical gold is to protect your wealth it is recommended to invest in gold bullion. Gold bullion is gold coins and gold bars that are usually a little above spot price. With gold bullion you get more physical gold for your money compared to numismatic gold coins and any other uniform forms of physical gold. Protecting your wealth from inflation or any other economic downturn does take some planning; with physical gold you will have an asset that has a track record of protecting wealth.