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The advantages are that it is number one, a hedge against a falling currency, like the U.S. dollar. It has a history of over 5,000 years as money. It is no one's liability. It is durable and that is why it has lasted centuries as money and if the current Fiat money system collapsed, would be used as money again.

Disadvantages are that it doesn't pay interest. If currencies are doing well (people actually think they are useful as a medium of exchange), then the price of gold could be negatively affected.

Regarding the interest it pays, Zimbabwe money may pay you a million percent interest, but the inflation rate is in the billions, so it's all relative to perception. A 100 Trillion dollar Zimbabwe note today is worth 1 U.S. dollar. (5/22/09)

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Q: What are the advantages and disadvantages of gold?
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