GOLD AND IT EFFECT IN A COUNTRY ECONOMY
According to the World Gold Council (WGC), a market development organization for the industry of gold, gold has been said to have a social and economic impact on the world economy at large. Base on WGC analysis is been said that; Gold mining company has employed over one million people in the year 2013, which can be said to hurt people's standard of living thereby lead to economic growth and development in the long run.
The social impact of gold according to WGC is that gold mining has help in the development of local human capital skills which is a driver that plays an important role in economic growth and sustainable development.
WAYS IN WHICH GOLD CAN HELP IN DEVELOPING AN ECONOMY
Gold mining
Gold mining is said to provide important sustainable socio-economic growth and development to a country that is involve in it, by bringing infrastructural investment to the region.
Gold refining
A country like Indian, gold refining has grown to some extent, in 2015 they possess 30 refineries which make them have 1,450 tonnes which are more than the average they import in the past years. This makes their balance of payment to either balance or surplus.
Gold Manufacturing
A country manufacturing gold tends to be self-sufficient as other country citizens will need their currency for transactions of items like gold, and jewelry. This will boost its currency purchasing power and thereby lead to a stable economy.
Gold and Digital Gold
Considering the era of barter system gold has been the basis for transactions due to the value it posses and is uses. Gold can be regarded as the most valuable precious stone in the world as at now and before.
When talking about Digital Gold is been regarded as gold in an abstract form, that is backed up gold physical gold.This makes it to have the value of gold. Base on the current analysis of gold token its been observe that a token of Gold (Digital Gold) gives room for users to purchase fine Gold of 99.9% (1 gram).
Effect of Gold in an economy
In country like U.S, gold can be used to determine the healthiness of the economy. When gold prices are on the high sides this shows an unhealthy economy, when gold price is low it shows the economy is healthy an investment like bonds, stocks, and real estates are profitable. This show that gold determined the level of success of other investment in one way or the other.
Advantages of Digital Gold
General merit of digital gold emanated from physical gold. This makes it to have stable value as that of gold bar and gold certificate. Digital gold can also be seen as a hedge against inflation as the value of gold does not rise during the time of inflation. Since digital gold is backed by gold, is value does not change when considering its stability to fiat currency.
Other advantages of digital gold
No transaction Limit: Digital Gold can be regarded as a borderless digital currency that posses an independent rate of exchange. This makes it thereby free from political situations and pressures from outside the world. With digital gold, transactions can be done with ease with other countries.
Asset Security: Digital gold users possess 100% unit of gold value. The term security in assets can be related to how liquid the asset is. Digital gold can be converted to cash within a short period of time without a change in it value, this make user asset intact without depreciation in asset value.
Investment: Basically investment is sacrificing of present income in other to earn more in the future or year to come. Digital gold can be taken to be an investment since it carries the same value as gold. This will enable low-income earners who could not have the financial capacity to purchase physical gold, buy gold, and thereby earn good income which in turn increases their standard of living.
Conclusion
Gold tends to create economic stability in any country that involve in mining, refining and manufacturing, but when considering digital gold more is been achieve in the economy which can be economic growth and development. Digital gold allows an individual with a gold token to purchase digital gold which is regarded as physical gold and hereby earn viable income which leads to an increase in the standard of living and has an adverse effect on the economy at large in one way or the other. On the other hand, digital gold bring conveniences to investors that wish to invest in physical gold as they will not be any need for a warehouse or bank to store gold. This will thereby have an adverse effect on the economy at large as the money for warehouses or banks will be used for another thing that will be beneficial to the citizen at large.
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