Coming Off The Gold Standard

Posted on March 15, 2018

Ever heard the phrase “A dollar saved is a dollar earned”?

Well, this doesn't quite add up. You see, since President Richard Nixon changed the rules of money by taking the U.S. Dollar off the gold standard back in 1971 turning the dollar into a liability instead of an asset, the dollar you thought you were saving is actually being eaten away by inflation. Savings are of course good to have as they give you financial freedom, but if you’re looking for your savings to support you in the future, then you are best investing your cash so that it is not being eroded away by inflation.

Gold backed money

Prior to 1971, money across the world was backed by gold and was relatively stable due to the Bretton Woods System. This worked fine until the 1960s when the U.S. began importing more than it was exporting meaning that gold was leaving their country as the U.S. Dollar was backed by gold at the time. Instead of letting the loss of gold happen, President Nixon ended the gold backing of the dollar. The U.S dollar then replaced gold as the world’s currency.

Up until then, every dollar in theory could be taken to a bank to redeem an amount of gold. However when President Nixon changed this, the dollar became an IOU from the US government. The dollar ceased being money and became a currency.

Because money is now a currency, it is always flowing somewhere. And because it is now a liability instead of an asset, it is always under attack from inflation. Save your money in an account by all means. But always bear in mind that there are methods to beat inflation and have your capital work harder for you. Investing in gold or stocks are just a couple of ways to make your money work for you and made possible with Mashreq Neo.

Buying Gold with Mashreq Neo

Mashreq Neo simplifies the purchasing of gold. Whilst buying physical gold is a good idea, it can be tricky to navigate as there are fraudsters in Dubai selling gold plated nuggets and coins. With Mashreq Neo you can buy your gold from a trusted source and via your phone making it easy to buy and sell gold at your complete convenience.

Buying stocks with Mashreq Neo

Buying stocks in companies is made easy with Mashreq Neo and because it’s connected to your current and savings account, transferring your money between accounts is seamless. When investment opportunities arise, you’re only ever a few taps away from owning shares in a company.

Financial Agility

Mashreq Neo gives you financial agility to pivot in different directions at ease thanks to its one-stop-shop for finance. By having your current account, savings account, gold, stocks and forex trading accounts all in one app, managing your money becomes easier as you have greater oversight and control of your money and it’s available at a tap of finger for you to take advantage of investment opportunities that arise.

Disclaimer: This article has been prepared solely for information purposes. It does not constitute an investment advice, solicitation, offer or personal recommendation by Mashreq, or any of their related parties to buy or sell any securities, product, service or investment or to engage in or refrain from engaging in any transaction, particularly, in any jurisdiction where such an offer or solicitation would be illegal. Neither Mashreq nor any of their related parties warrant the accuracy of the information provided herein and views expressed in this article reflect the personal view which does not take into account of individual clients’ objectives, financial situations or needs. Investors are required to undertake their own assessment and seek appropriate financial, legal, tax and regulatory advice to determine whether such investment is appropriate for them in light of their experience, objectives, financial resources and other relevant circumstances. Neither Mashreq nor any of their related parties accept any liability whatsoever for any direct, indirect, consequential or other loss arising from this article and/or further communication in relation thereto. Mashreq do not accept any obligation to correct or update the information in this article.