In 1962 in a picturesque setting in Santa Barbara, California, two local entrepreneurs opened a low-cost, roadside inn where the nightly room rate was just $6.
They called it Motel 6.
And today the chain has grown to over 1,400 locations.
If you want the most straightforward explanation for why you should own gold, consider your local Motel 6.
It’s noteworthy that, today, the very same Santa Barbara location now rents its rooms for nearly $90 per night.
That’s a 15x increase in 57 years, an average increase of roughly 5% per year.
Are the rooms 15x bigger, or 15x nicer? Not really.
The reason the price has increased so much is because of inflation– the gradual erosion of the US dollar’s purchasing power over the past several decades.
This is why it’s important to have a conversation about gold.
Unlike paper currencies, gold has a 5,000 year track record of keeping up with inflation.
In fact, when priced in gold, a room at the Motel 6 has actually gotten cheaper.
Back in 1962, an ounce of gold would buy you about 6 nights at the motel. Now, despite the 12-fold increase in the price of a room, one ounce of gold will buy you 21 nights there.
That’s because the price of gold has largely outpaced the rate of inflation and the decline in the purchasing power of the US dollar.
Gold is a fantastic long-term store of value. It’s also an insurance policy– a hedge against paper currency, systemic risk, and uncertainty.
And there’s plenty of those in the world.
But there’s also a number of catalysts emerging right now that could send gold prices substantially higher in the near future, so it may be worth considering gold right now as a speculation.
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