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Stock Ideas Investors Daily Edge Gold is Wealth ! not money is typically a docile asset
Stock Ideas Investors Daily Edge Gold is Wealth ! not money is typically a docile asset 
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| Gold is Wealth ! not money is typically a docile asset |
| Wednesday, 23 July 2008 | ||||||||
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Is gold “money”? Is it merely a form of wealth? Is gold just a type of insurance as my fellow IDE contributor, Lynn Carpenter, recently suggested? It’s time to revisit exactly what you hope to accomplish when you consider buying gold or other precious metals. The following words are from Lynn’s recent editorial: “Gold is not money. Not these days. Not even Switzerland backs its currency with gold anymore. Gold is a metal that, excepting the Third World (now politically correctly known as developing countries) and possibly Colombian drug runners, is never passed from pocket to pocket in exchange for groceries, rent or car payments. So people who are buying gold are not motivated by the same reason as people who buy spendable and freely exchangeable yens, euros or other currencies. People buy gold because they think that if the whole world falls apart and anarchy rules, they will have something to spend in an emergency.” Lynn is delightful and exceedingly intelligent. She makes interesting points in this article. I do however, have a differing slant on the issue. It is of the utmost importance that you fully comprehend exactly what gold is and what gold isn’t. What you have used as “money” over the recent decades is on the course of crumbling like a dropped doughnut. Money is nothing more than a medium of exchange. Gold is definitely not today’s most common form of exchange but it certainly can be traded for goods, services or even other currencies. Here’s a recent announcement from Goldmoney.com: “7 April 2008 - GoldMoney is pleased to announce a new foreign exchange service. Customers can now conveniently switch between any of the four currencies in the Customer Segregated Funds Accounts that GoldMoney maintains at its banks. The currencies are the US dollar, British pound, euro and Canadian dollar, all of which can be used in GoldMoney to purchase gold and silver or be received when customers sell metal.” Gold is commonly exchanged for goods or services in developing countries. The Asian countries have a long-standing affinity for gold and silver. The same holds true with the Middle East.
You likely know by now that I think gold is the real money and what we commonly use as money is the imposter. We are in an age of bailouts! These bailouts will extract more than a pound of flesh from US citizens. They are going to take an extreme toll on the US dollar. It has never been more important for you to understand the root causes of these problems. Everyone on the planet will be affected to some degree because the US dollar has been the reserve currency for 60 years. There are no “dollar free” zones. Currency, Treasury or financial assets are ubiquitous. Our present state of unlimited debt and unlimited fraud sits upon a foundation of fiat money… money without substance. Honest forms of money, like gold or silver, serve as checks and balances to the types of abuses our present economy and financial system deliver on a weekly basis. Lynn is exactly right. There is no government on the face of the earth that backs its currency with gold. They are all paper or digital entries. Unfortunately, if this dubious experiment works it will be the first time in history. Fiat currencies fail. There are giant cracks in the present system. You do not replace a failed fiat system with another fiat system. Enter gold/silver/commodities. Gold is a form of protection. It shields against government and financial abuses. Lynn is right that gold is typically a docile asset. It just sits there protecting its owners from the ravages of inflation. She states…. “It can only wait for other things to go wrong enough to worry people into cleaving to its side. Falling in love with gold is like falling in love with your life insurance policy. Do you really, really want to cash that in?” No, we sure don’t, Lynn. Still, all the signs point to the essential need for financial protection at times like the present. Let’s look at gold’s most recent history:  How many US citizens wish they had this form of insurance over the last 12 months? Or the last 6 years for that matter. At times of distress, gold goes way beyond merely keeping up with inflation. Stay tuned for more of this action. I have long taken it as a given that both gold and silver are officially suppressed. They remain competition to the closed loop funny money endeavors. The fine work at GATA (www.gata.org) over the last decade more than amply demonstrates this premise. The suppression merely legitimizes both precious metals as money. Why even bother with them otherwise? They are history’s most recognizable forms of money. I will go so far as to say that gold not only is an honest form of money…. It represents freedom and individuality. Fiat money and those who administer it intend to enslave. The Founding Fathers of this Republic knew well the ills of straying from sound currency issued by the government, not a foreign based elitist franchise. The ongoing Fannie and Freddie Krueger bailouts are going to slaughter the US dollar (article coming). It has never been more important for you to fully comprehend what is and what isn’t real money. These are extraordinary times. Buying precious metals now is like being able to buy life insurance after you’ve been diagnosed with stage four cancer. Invest Resourcefully, Rusty P.S. To let me know what you thought of today's article, send an e-mail to: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
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