Why Buy Gold And Gold Stocks? I'll Tell You Why
Posted by paulnathan2000 10 years ago to Economics
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Gold and silver indices, no. They are used by banksters to manipulate prices of the genuine asset, just as the banksters use financial instruments (including fiat) and market rules to manipulate share prices. Be aware that such manipulations will detrimentally affect the value of your holdings. Don't buy on credit or margin.
"Wealth is production, and gold is the equivalent of wealth
produced. Because neither wealth nor gold can be created out of
nothing, neither wealth nor gold are possible without individuals
of intelligence, individuals of ability, and individuals of productivity.
Fiat is force and it is the equivalent of wealth confiscated.
Both fiat and force are the tools of those that seek the unearned.
Where a gold standard is welcomed by productive and honest
individuals, the fiat standard is welcomed by those that prefer
government control and regulation. Where the gold standard
demands the earned, the fiat standard grants the unearned. Where
a gold standard evolves from individual choice, a fiat standard
evolves from government edict. Where a gold standard necessitates
only that individuals be left free to act, to choose, and to
trade, a fiat standard invites government to control, to regulate,
and to dictate individuals’ choices, actions, and the terms of trade.
Gold limits the government’s power to spend more money
than it receives in taxes and, in doing so, gold limits the government’s
arbitrary power over the economy; gold checks artificial
money and credit expansion; it prevents artificial booms, which
lead to very real busts; gold protects individuals from economically
unsound government programs; and it protects citizens from the
inflationary confiscation of private property."
Paul Nathan
My uncle purchased one troy ounce per week from the early fifties into the early eighties. When the Hunt brothers made their run on the precious metal market, my uncle sold everything at near $850 per ounce. When the market came back to reasonable "value", he traded all the "fiat" back to gold. My cousin is sittin pretty!
Gold is now a predominant commodity for the manufacturing industry. It takes "X" resources to locate, mine, refine and distribute. This determines fair market value....not the "fiat" speculations of the stock market.
I have been buying copper, silver, gold ever since.
Wouldn't it be funny (sarcasm) if Fort Know was empty, and all the security was just for show to try and fool all of us into thinking it was full of Gold. I have been wondering this for decades now.
The answer to that question lies more abroad than it does here. If the world falls into a deflationary recession, which is the direction their headed, it will affect the US. Gold's fall is indicating that scenario is developing now.
See http://www.paulnathan.biz/ for more on this subject.
I was refering to a gold standard, not today's fiat standard.
The upside of gold (and silver) is insurance against runaway inflation. Since 2008, under both Bush and Obama, the Fed has increased the official money supply by over 40% (mostly by buying treasury bonds with newly printed bills). This monetary inflation (mostly) hasn't shown up as increased prices and interest rates yet because of the ongoing depression, but it will -- and as soon as the treasury has to start paying more than 0.1% interest on the national debt again, that interest cost is going to be a BIG problem, which may well force them to print even more money. (Raising taxes won't help because we're above the hump on the Laffer Curve.)
A couple of big downsides to watch out for: The next president, whoever he is, may very well try to seize all gold and make it a controlled substance again, as FDR did in 1934. (So don't have a bank or anybody else hold your gold for you, and try to buy it without giving your name or paying by card.) And/or, he/she may find an excuse to have the EPA shut down gold mining operations. I would not want to be holding gold mining stocks if that happens, at least if the company's mines are in the US.
i am,a simple business owner, a manufacturer of products. as far as i can tell the economy is far worse than the press and wall street are making it out to be. the government will not take gold out of the economy because it is traded like oil, and they aren't going to take oil out of the economy. they will continue to print money and the interest rate will stay where it is for a long time to come. one should realize that those who run the government are poorly educated, they went through the government school system and as a result they simply do not know how to think and they prove that each and everyday. i would love it if Ayn Rand were able to give her view of things today or maybe she already did and i read it but don't recall it at this time. in my opinion the usa is screwed!
http://www.marketminder.com/a/fisher-inv...
as I've often suggested before.