(August 9, 2012) - The United States House of Representatives passed H.R. 459, a bill from noted Congressman Ron Paul, a little more than week ago. The bill is designed to audit the Federal Reserve; something that gold investors are quite happy about. While it still has to pass the Senate and be signed by President Obama before it can become law, the media is saying that it could be very good news for gold. The reason for the optimism among those owning gold today is that an audit could show just how much trouble the dollar and the US economy is in. If misconduct is found, it would show the doubtful that investing in alternatives such as precious metals might not be such a bad idea after all.
The Fed has been deemed by many to be 'illegal' since it was first established and this is a notion widely held by many gold investors in modern times. Because the US dollar is not based on gold and is a fiat currency, inflation is the norm and its buying power has been in a tight and deadly downward spiral since 1913. Owning gold is a way to shore against the eventual doom that economic experts predicted at the beginning of the 20th Century and that analysts today believe is still very likely to occur.
Vin Maru of Gold Seek explains the dollar's trajectory from 1913 until now by saying, "Since then, it is estimated that the dollar has lost 95% of its purchasing power by way of inflation (the increase of the money supply), so it really has only 5% left to go. As the value of the US dollar moves towards its intrinsic value of zero, gold and silver as true money has only one way to go and that is up."
While this could appear as dramatic to some, it is in no way a new theory and has been spoken against since the US left the gold standard decades ago. Recent moves to make the yellow metal a tier 1 asset class so that it can serve as collateral for banks means that demand is very likely to increase in the coming future whether or not Ron Paul's bill ever becomes law. Silver, too, is another strong choice when investors are looking for an alternative to the dollar.
Maru goes on to say, "If the correction in gold is over and we are at a start of a new trend higher over the next year, this summer will prove to one of the best buying opportunities we have seen in a very long time."
Many investors are not interested in selling what they buy later in the year, but for those who decide to go that way, profits are believed to be quite likely. This is just one more voice added to the choir of analysts, economists and financial pundits who are singing the praises of precious metals as assets that can help guard against economic uncertainty that seems to be looming as 2012 begins the downhill ride towards 2013.Report Filed: