“How cheap can I buy gold?” and “Is gold safe?” are two of the most frequently asked questions gold brokers receive. As a former gold broker, I know.

I also know firsthand how safe some of the “safest” stocks have been over the last year… Who would have thought AIG, Citi, Bank of America, GE and most of Wall Street would be where they are today? Unfortunately, I have come to understand how secure my home equity is as prices continue to fall and my equity along with it.

Even cash is shrinking. The dollar buys less than ten cents of the goods and services it did not long ago. Paper, or money, only has value when others are willing to accept it for the goods and services you need. The federal government continues to purposefully deflate the dollar as a strategy to help offset its massive debt (and they believe it will help prevent a full-blown economic crisis, which is likely to be true in the short term). They have printed more money in the last two years than they have in the history of our country combined! So these dollars become less valuable to everyone who owns them…and guess what, just about everyone owns them. You own them, I own them, China owns them… lots of them. As the world’s reserve currency, almost everyone owns US dollars in one form or another; and those dollars buy less every day.

So is gold safe? Compared to what? If you have been following its prices over the past year, as the economic crisis deepened, the price of gold rose. Foreign countries and their central banks used to be net sellers of gold. Not anymore. They have all become buyers. Basically, they are accumulating it. Why? Why would China, which produces more gold than any other country, keep everything it produces and continue to aggressively seek to buy more? For the same reasons, you should be learning enough to see if it’s right for you.

My answer: is gold safe? It’s safer when other “safe bets” turn risky. Personally, I don’t care what the price of gold is right now. Maybe gold will drop lower and never come back. Again, I don’t care. Looking for a way to generate short-term profit is not the reason I tell my friends to buy physical gold with a portion of their liquid assets. As long as economies around the world are struggling as they are now, I see little else that has the same potential upside protection that gold has traditionally provided. I want a hedge… some chance of owning something everyone recognizes and values, if the economy were to implode like it almost did in October 2008.

In my opinion, the real danger or risk of buying gold; it is buying the wrong gold for the wrong reasons at the wrong price. I know it sounds elementary, but I can tell you that most of the thousands of potential gold buyers I talked to when I was a gold trader were wrong. To avoid this… you need to trust someone and Learn enough to know the right gold for the right reasons at the right price for you and your situation…” Owning gold is not for everyone. If you can’t answer these questions, someone else will answer them for you.

I don’t have a crystal ball; but take confidence in making a strong prediction: the more money our government prints and releases into the economy; the further away everyone is from knowing what will happen next… End of story.