Gold: Used As A Hedge?

In today's volatile and uncertain market, one questions the role of gold. Is gold to be used as a hedge against rising prices? Is gold a hedge against governmental or monetary uncertainty? With gold prices generally rising, many are looking at purchasing gold as a hedge against a declining US dollar.
The dollar has lost more than 80% of its value since the early 1970's when Nixon took the dollar off the gold standard. While the US has generally wanted a strong dollar, recent policies have allowed its worth to fall because a weak dollar made US exports more appealing and less expensive.
It used to be the weak currencies were talked about in countries such as Zimbabwe where hyper inflation made the money worthless. Now we are having currency and credit problems in more advanced countries. It started with Greece and Iceland and has expanded to other European countries as well as the United States.
It is necessary to understand how money first came into existence. Money came about as an improvement over bartering. In other words, prior to money you needed to find a trade partner who had the exact thing you wanted to trade or barter for and vice versa. Then, the quantities and amounts of the traded or bartered items needed to be satisfactory to both sides. Money came about as a impartial store of value, and as a store of value of labor. It was no longer necessary to find the perfect barter partner. It became a means by which two people who had never done business before could exchange goods and services in an equitable manner.
All was well and good as long as money was an accurate store of value. When more fiat currency began to be printed without anything to back it, it was no longer a true storage of wealth. This happened as the dollar was taken off of the gold standard or divorced from the gold standard.
In that respect, gold is a hedge against a falling dollar. The value of the dollar falls when more dollars are printed with nothing to back them. In that instance, the price of gold generally rises, reflecting the true value of the dollar. Gold holds its value in relation to the falling dollar.
Gold can be used as money when it is 999.9 Kinebar quality gold. So it can be used for both, as money, and as a hedge against falling fiat currencies. Especially when it is 999.9 Kinebar quality gold, it cannot be counterfeited.
Cheryl Jones has been on the leading edge of trends and is now helping to spread the knowledge of the world's first and only private global currency exchange system. Go now to: http://goldbackedsavingsplan.com to learn more. She can be contacted from the site for answers to questions.