Turning Gold Into Money

Gold is one of the most dynamic elements of the modern economy
and some might find it funny that the oldest form of valuing
physical commodities is still thriving today. The first gold
coins were produced in 700 BC and since then the precious metal
has been used as the primary exchange element. The fact that
gold was scarce and highly valued made it the perfect means of
exchange, regardless of what the exchanged items were. The
history of gold turning into money spans over a period of 2600
years and the turning point in gold's history is the year 1971.


How Did Gold Become Paper?

Throughout history, gold and silver coins went through a
process of debauching. Such coins began to be created out of
gold and other metals, thus making the values of the actual
coinage fluctuate in time. The process of turning physical gold
into money began when goldsmiths, who used to store gold for
other society members for a fee, started to issue receipts for
their storage. The receipts idea spread quickly as it was more
convenient than carrying the actual metal with them, so people
began to get accustomed to the idea of paper money. Goldsmiths
gradually turned into bankers and the currency evolutionary
process continued developing.

Why Did The Gold Window Close?

The 15th of August 1971 is the day when the "Gold window" was
closed by the American president Richard Nixon. From that
moment on, paper money could no longer be converted to gold, a
fact that took the precious metal out of currency exchanges. In
order to understand why the situation with gold in the economy
reached this point, let's travel back in time to the moment
when bankers saw the opportunity of replacing metal with paper
money. Since they had the power of issuing the receipts for
gold, bankers thought of producing more receipts than the
amount of gold they held. But, as you would expect, this
practice also became popular and bankers soon started lending
these receipts to the early governments and to the monarchs of
the epoch.

New Acts And Regulations Concerning The Use Of Gold

England was the country where bankers created the first central
bank. The main purpose of such a bank was to lend money to
monarchs, but it also served as protection for those bankers
who issued more money than they could redeem in gold. However,
it became obvious that this practice had a negative impact on
the country's economy. This lead to the apparition of the
"Peel's Bank Act", which stated that banks are not allowed to
issue more paper money than the gold they actually had in
reserves. Thus, the importance of gold as a decisive factor in
the global economy remained high all throughout modern
financial history.

What Do You Know About Modern Gold?

An interesting evolution of gold prices began in 1934, when
gold was priced at $ 20. In the period until 1971, the gold
price remained around $35. However, with the changes that
occurred in the global economy, gold prices reached $300 and
they remained above or very near this threshold. Various
factors in the geopolitical world had their influences on the
evolution of modern gold prices.

Can Gold be Controlled?

Do you ever think about gold when you are going to work or
while shopping? Even though our modern society perceives gold
more as a fashion item, nations still rely on the power of the
precious metal in order to keep their economies balanced. We
might not see gold in stores, while paying our taxes, or while
taking credits from a bank, but it is an element profoundly
involved in all these actions. It is fair to say that,
throughout human history, we were often the ones being
controlled by this precious metal, and not vice versa, as most
people believe.


About The Author: Dean Brown is the Author of "A Guide To
Investing in Gold", an e-book decidated to helping people
understand that gold is an essential part of any investment
portfolio. To get more details and enroll in Dean's free
mini-course on Gold Investing, go to
http://www.goldinvestingbook.com

Many people now days are buying a second home abroad, say Dubai
as either a holiday location or because they have decided to
relocate to that area due to work commitments or because they
are retiring and would like to enjoy a bit more sun.

When people are thinking of buying a property abroad there are
a number of issues you may need to consider before making that
all important purchase and I list below some of them.

1. How much capital do you have available to invest in the new
property and if you need to obtain additional capital for the
purchase will it be through your current lender or will you be
requesting it from another source, say a lender in the country
where you are looking to purchase your property. If you wish to
lend from a financial institute in the country of your choice
you will need to investigate what percentage of borrowing you
allow, in some countries you will only provide them with an 80%
loan, which means you will need to provide the other 20% capital
for your purchase.

2. The type of property you are wishing to purchase? Will it be
a town house, an apartment or villa? Also what sort of location
are you looking for? Do you want to be in a gated community or
a complex, the country, town or village? Also what sort of
facilities do you want close to your property, such as shops,
restaurants, bars, and sports facilities?

3. Make sure that you contact a reputable real estate agent,
one who will be able to provide them with all the necessary
information on the property that you are looking to purchase,
including all building regulations and planning permissions
that should be held. Also this agent should be able to put them
in contact with a solicitor/legal advisor who will be able to
deal with the drawing up and completion of the contracts of
sale.

4. As stated above, where possible request that the real estate
agent provides you with the necessary paperwork relating to the
buildings legality. In some countries an issue has arisen where
people have brought properties and then find that permission for
the property to be built has not been given and the consequences
in some respects have ended up with these people not only losing
their homes but also all the money they have invested in the
property.

5. Another thing I would suggest you carry out is research on
any local customs or laws for the region you are looking to
move to, as in some countries you may find their laws and
regulations are not so relaxed as where you reside now, say for
instance you decide to purchase a property in Dubai you will
find that you are only allowed to drink alcohol within the
confines of your own home, in hotels or at a licensed premises
any where else and you could find yourself at the mercy of the
local police force.

Finally another reason for buying a second property abroad that
could influence your decision is the Cost of Living i, for
example you may find that the money you have to buy a property
at home, say a two bedroom apartment will in fact allow you to
purchase a three bedroom Villa in the country where you are
looking to purchase. By investing in the right property in the
right area you can providing yourself with an additional income
from rentals and a property that will incease in value over the
coming years.

I hope the above has given you food for thought and helps you
when making a decision about purchasing a property abroad.


About The Author: Ahmed Raz is a director of
http://www.dubailiving.co.uk Which includes the informative
Dubai Lifestyle and Property Forum
http://www.dubailiving.co.uk/forum/index.php