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Stock Ideas Investors Daily Edge You Can’t Squash a Gold Bug
Stock Ideas Investors Daily Edge You Can’t Squash a Gold Bug 
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| You Can’t Squash a Gold Bug |
| Friday, 23 January 2009 | ||||||||
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Gold Bugs are a resilient lot. They’ve been around since ancient times and tend to proliferate during times of monetary and economic chaos. The Feds attempt to squash them on a regular basis, but that’s simply another of their failed strategies. You would be wise to investigate the foundations of this bug’s staying power. Wikipedia describes gold bugs as “investors who are very bullish on buying the commodity gold”. The label is often used in a disparaging manner. Wikipedia needs to do a little more research, as they haven’t scratched the surface of the layers of intricacies of a true gold bug. Their description has merely described a gold bull. Many people come and go in the precious metals arena. On the other hand, there is no such thing as a periodic gold bug. Either you are a gold bug or you’re not. Wikipedia also describes gold as a “commodity” with no hint whatsoever of its monetary use. How shallow. That’s contemporary America for you. This essay might aptly be called “Confessions of a Gold Bug” as I’m going to explain exactly how I’ve become such a critter. My precious metals roots go back to 1973 when I first boarded the silver train. It was a bullish time for silver and the Hunt Brothers eventually climbed aboard. Unfortunately, I was out of the market by the time they ran it up and were railroaded by the commodity exchange. This was the first of many lessons regarding staying power… patience grasshopper. It wasn’t until 1993 that the topic of precious metals next found my attention in a serious manner. I read Jim Blanchard’s Gold Newsletter (that’s their gold bug pictured above) and decided it was a great idea to attempt to make a few bucks via gold stocks. That made me a gold bull, not a gold bug. Little did I know how profoundly that decision would ultimately change my life. I read a lot and have made the gold market my daily focus for the last 15 years. Shockingly, you would be hard pressed to find a keener and straighter route of entry into understanding world finance, economics and politics. This study is what has subsequently turned me into an unabashed gold bug.
Enough about me… this essay is actually about you. Maybe you, too, should become a gold bug. We are in an era where the fiat monetary system is crumbling just as it always has on an historic basis. The gold bugs clearly saw this coming and screamed it from the rooftops to little avail. The gold guys and gals have the keys to the path out of the present carnage. Gold and silver backed money have been dismantled. History has a way of trumping such arrogance. Gold represents honest money, honest markets as well as true freedom. This is the foundation of the United States and it was put in place for essential reasons. Our Constitution was birthed through the hands, minds and souls of incredibly wise and divinely guided men. We’ve now devolved to the point where gold is the enemy of the present state. That is sad. The precious metals represent competition to, as well as an escape from, dishonest money and markets. The funny money gang would have you believe it is gold that is the anachronism. History speaks against this shortsighted claim. Lack of discipline in the global monetary system has sponsored the likes of Bear Sterns, Fannie and Freddie, Lehman Brothers, AIG, the year of the bailout, Madoff, all of the other recent officially sponsored atrocities, and those yet to come. This infestation has just begun. The US is now an economic wasteland and you can clearly see why a system with no discipline (gold) always leads to fraud and excess. Human nature doesn’t change and our Founding Fathers insightfully warned of current events. Roosevelt illegally confiscated gold from the American people in 1933. Nixon reneged on the international agreement to exchange foreign currencies for gold 38 years later. We can thank this dynamic duo and most of the administrations ever since for our present predicament. The world has been on a fiat standard (no standard) since Nixon’s default. Gold has been targeted for at least the last 76 years in one form or another. The Fort Knox gold vaults are likely barren. * The Ghost of Fort Knox Past - 10/3/2007 * The Ghost of Fort Knox Past: Part 2 - 10/10/2007 * The Ghost of Fort Knox Past: Part 3 - 10/17/2007 * The Ghost of Fort Knox Past: Part 4 - 10/24/2007 * The Ghost of Fort Knox Past: Part 5 - 10/31/2007 * The Ghost of Fort Knox Past: Part 6 - 11/7/2007 Gold and gold bugs are the recipients of regular foot stomps. Citizens are dumbed down, distracted and guided away from the safety and freedom represented by precious metals. The attempts to squash always fail and are for the most part pathetic and laughable. That is not to say they aren’t temporarily painful. Why exactly are gold bugs so resilient? * Bugs tend to study true history as opposed to the revisionist state sponsored agendas. * They tend to understand, claim and advocate Constitutionally guaranteed freedoms. * Bugs study free market economics or Austrian Economics as opposed to the failed socialistic ideas that dominate the present landscape courtesy of John Maynard Keynes, Karl Marx and Milton Friedman. * They aren’t afraid of going against crowd mentalities. * Bugs care deeply about their country and their fellow citizens. * Some incredibly bright people lend their analysis in this sector. * Bugs are born with antennas that detect pure bullshit. * They tend to be far sighted. * Bugs are a self-reliant lot as opposed to wanting to be wards of the state. * They demand a level playing field for all members of society. This essay is primarily about the impossibility of squashing a gold bug. Let’s look at an example. The Bank of England announced in 1998 that they were going to give away half of their gold reserves via periodic auctions. Gold had been a foundation to their monetary reserves for the previous 300 years. The auction system was designed to pound gold and demoralize its advocates. They considered gold followers to be little more than roaches and called in the exterminator. It worked for a spell as gold fell to the lowest point since 1979 and subsequently plummeted to the $250 range. It cost the British dearly and citizens are raising hell about it to this day. Gold bulls were smashed but gold bugs were undaunted. They saw through the ploy and remained steadfast. At this point, the Bank of England’s raid (chuckle) is little more than a blip on the radar screen. The same holds true for all of the various announcements of central bank sales, IMF gold selling, paper market takedowns on the New York Comex market, leasing and loss of citizen gold, or the most recent contrived events of last summer. Yes, the precious metals were taken down last July in one more failed attempt. How tedious. Gold marches on because it’s not just Superman that stands for truth, justice and the American way. Gold bugs will not be silenced. Did I mention gold bugs are tougher than nails and will stand on principle? They also have keen senses and know the difference between paper claims to precious metals and the real thing. Others insist on learning this the hard way. You can extrapolate the above chart forward for a picture of gold’s rising future. That bug doesn't get stomped. You may or may not choose to become a bona fide gold bug at the present time. The learning curve is steep and the wounds can be painful at times. You should, however, be a precious metal bull. These are the times for which gold was born. Safety, profits and sound sleep lie therein. Buy precious metals while you still can. Gold stocks are the primary focus in my Resource Windfall Speculator advisory and they are leveraged to a rising gold price. Invest Resourcefully, Rusty
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