The US Government confiscated private
gold in 1933. Let me repeat this as it is very important to note; The
United States Government confiscated the personal private gold
supplies of it's citizens in 1933. At the beginning of the worst
economic crisis in the history of our country, our fearless leaders
figured that the best step to ensure the wealth of the citizens was
to steal the wealth of it's citizens.
It is also important to note two
things that the government did not do. First of all, they didn't
confiscate all of our personal food supplies. Secondly, they were
nice enough not to break all of our legs rendering us incapable of
working. This is important to note because many Americans are
preparing their own safe havens for their families and themselves in
the event of another major collapse. A safe haven in this case, is
simply something that is going to keep you fed. Seeing as how the
government doesn't have a history of confiscating our food, nor
physically preventing us from working in exchange for food, but they
do very specifically have a history of taking our gold right at the
beginning of a collapse, why then would we think that owning gold is
a safe haven for our wealth?
As an investment rather than a
safe haven, gold is no better off. Any good investor will tell you to
buy low, then sell high. That option doesn't exist with gold right
now because gold is already high. “Buy high, sell high” is not
something you'll hear an investor say, unless he is selling pot. In any case, the price of gold is
extremely high compared to historical trends. With that trend being
caused by the weakness of the dollar, and with the dollar having
already lost over 97% of its original value and not having much
weaker it can get before it collapses, like any bubble, the price of
gold can't go up drastically further either.
To put this in perspective,
consider the real estate bubble. On top of federal legislation, the
housing bubble was aided in no small part by unnaturally low interest
rates. Mathematically, interest rates couldn't have gone much lower
before the banks would have been paying you to borrow their money. If
the driving factor of the bubble is near its mathematical limit, then
the bubble is near its bursting point.
In the gold market, we are at
such a point. We aren't finding wonderful new uses for gold every day
which has driven up it's value. Gold's value has been driven up by
two main factors, Glenn Beck's doomsday radio show, and a weak
dollar. Although I don't disagree with Glenn's hysterics, I tend to
think the weak dollar deserves more of the blame. With that said,
because the dollar cannot get much weaker until it loses any value at
all, gold, as an investment, only makes sense if you've already owned
it for several years.
So here is what we are left with.
If you buy gold now, and the economy collapses as you and I suspect
that it will, then the government is very likely going to confiscate
your gold just like they did before, leaving you with nothing. If
you buy gold now, and the Ron Paul Revolution turns the tide of the
nation, audits the Federal Reserve and reverses their inflationary
effect on the dollar, then the price of gold is going to plummet, and
you will lose your shirt. In short, if you buy gold now, your likely
outcomes are to lose your gold, or lose your shirt. Neither option is
going to feed your family.
So what is the safe haven? To
begin with, it is food. Beyond that, your safe haven is capitalism,
or your means of production, or your means of working for food.
Although gold holds its value as a medium of exchange better than
paper, it is still only a medium of exchange. Gold is not the wealth
being exchanged.
Even in communist China,
capitalism is difficult to extinguish for this very important reason;
governments can fool liberals into thinking it is justifiable to
steal an individual's money, but they rarely have the guts to steal an
individuals food, or ability to work. When your safe haven exists as
money, whether it is gold or paper, you make it easier for the
government to rob you of the fruits of your labor. When your safe
haven is food, and your ability to work for it, then it won't matter
if we switch to a seashell standard, you'll be able to provide the
necessities.
very good article it makes you think for sure.
ReplyDeleteStrained logic.
ReplyDeleteGold is money, a medium of exchange, a store of value. You suggest one should hold dollars or exchange dollars for gold, but store value in food? Food rots, spoils, is expensive to move for it's value, it can serve as a good for barter, but this is different than it being money.
<< If the driving factor of the bubble is near its mathematical limit, then the bubble is near its bursting point.>> What then is the mathematical limit for money printing? Certainly history shows it is many orders of magnitude beyond where we are now.
"With that said, because the dollar cannot get much weaker until it loses any value at all" You seem to be suggesting that if the dollar keeps loosing 3-5% a year this will make it suddenly reach zero and then we'd be better off having food that spoils and can't be moved easily.
<> You suggest governments seizing property, shutting down businesses, or impacting them through regulation is rare??
I'm not sure what you mean by "false god of the revolution". Your title suggest that you find the exchange of fiat money for sound money constitutes worship of a "false god"?
Blasphemy!!!
ReplyDelete