All This Gold Bullion Bull Market Hype is Just That – Bull….! (+2K Views)

So says Tom Burnett (http://tergeist.wordpress.com)  in edited excerpts from an article* which Lorimer Wilson, editor of www.munKNEE.com (It’s all about Money!), has further edited ([  ]), abridged (…) and reformatted below  for the sake of clarity and brevity to ensure a fast and easy read. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement. Burnett goes on to say:

Don’t Succumb to Precious Metals Dealers’ Sales Pitches

[Some people] are also stealing the last hope of individuals, ounce by ounce, by packaging gold and silver as something that will hold it’s value and selling it to people as a hedge against loss.  That’s nonsense.  No one in the world has the right amount of money. You either don’t have enough or you have too much.  So either you can never buy enough silver and gold to make any difference at all or you don’t need it to begin with.

The main sales pitch is that gold and silver are becoming rare and are used in manufacturing, so the price must go up. You had better buy it while you can for $1,500 an ounce, they say.  Millions of Americans are buying gold and silver with their last savings dollars because they think gold and silver are going to be the currency when the economy fails.  It isn’t, of course.  Food is, and knowledge.

Have you ever seen a balance beam scale as depicted below? [No? Well,] IF the economy fails – which I now no longer expect – you will bring your bag of silver to a farmer or butcher or fisherman and IF he is willing to trade at all, you’ll put your silver on one side until you have equaled the weight of whatever you want to trade for.  That $50 an ounce you paid for silver was what you shelled out for it back when – before you got hungry.  You won’t have enough metal to make a difference or to hedge your wealth.

{IF the economy fails, however, you won’t have enough metal to make a difference or to hedge your wealth. Today $1,500 can buy you 500 egg-laying chickens ~OR~ ONE ounce of gold.  If the economy crashes, the person with the chickens is going to get about 500 eggs a day.  One fine morning you will wander over to the farm with your ounce of gold and expect it to be worth 500 chickens.  Let me know how that works out for you and how the landlord likes 500 chickens in your Malibu condo.

Here is What No One Will Tell You and What You Still Won’t Believe

Precious metal dealers are in business to make money for themselves– not to provide for your future.  If one of them thought for a New York minute that the actual VALUE (not the PRICE- there is a huge difference) was going to triple in a year or five years, they wouldn’t sell it –  EVER. They’d keep it.  No one would sell a huge guaranteed profit if they could make more by doing nothing. The mere fact they are willing to sell it to you means that your cash is more valuable than their metal.  

Precious metals dealers sell their product by creating a market in your mind. Obviously they make enough profit to be able to get more and keep selling it to you.  It’s sort of like passing the plate in church. You pay me now and I’ll guarantee you a profit – eventually – after you are dead but for now I’ll take the cash, thank you very much.  Oh, and go spread the word.  We need all the cash we can get….er…all the souls we can save.  After they are dead. IF the economy crashes, precious metals – and your hedge against disaster – will crash right along with it.  Why wouldn’t it?

“VALUE” does not appear by magic. It must be created.  A lot of ‘value’ is perception. It doesn’t cost much more to make a Cadillac than a Chevrolet.  Perception. I’ll use that word again later. If, however, the economy does NOT crash, precious metals dealers will just keep right on selling you stuff you don’t need by convincing you that the next big jump is right around the corner and you better get in early because the price is going up.

Don’t Believe Any of These Stories Either

(1) When things get bad, gold and silver are the only forms of money people will accept. That’s silly.  NO ONE will accept it.  First, no one under about fifty has ever SEEN gold or silver money and wouldn’t know what it is.  People who DO know what it is either don’t want it – because they don’t know what to do with it – or can’t make change for it.

Since it’s not in general circulation anymore, no one even knows if it’s real gold or silver unless it’s silver dollars – which are worth, in a subsistence economy, a dollar.  Or a $20 gold double eagle which you paid $20,000 for but will be worth….$20.  Face value. The whole point of denominated money is face value. If it’s in the form of bullion, no one will take it because it is probably counterfeit. The certificate that it came with is real – it just isn’t true. YOU can’t tell the difference.  Do you have a touchstone assaying kit?  Do you know how to use it?  Probably not…The ONLY way to assay a gold bar is either by melting it (called a ‘fire assay’) or x-raying it….because that certificate that came with your silver and gold is kinda like the Constitution – it’s just a piece of paper. You don’t know what you REALLY bought without doing one of [the aforementioned two] things.

(2) They don’t mine it anymore/ there isn’t enough to keep up with demand. I suppose there will be lines around stores to buy it like the lines at gas stations in the 70s because everyone needs gold. So the price will going up. [You think?]

(3) China is going to buy all the gold to hide in their central bank. Since they already control most of the world’s supply of rare earth minerals which are worth more than their weight in gold, they don’t need the gold – maybe they just like the color. So the price will go up. [Really?]

(4) The U.S. is going back on a gold standard. Not likely.  If we had any gold we wouldn’t be borrowing two BILLION dollars a day from China to pay the interest on the TRILLIONS we already owe them. Anyway, that will make the price of gold go up. [Yea, sure!]

(5) The U.S. is going to confiscate all privately held gold. All the more reason for you to spend $1,500 an ounce for it and hide it because you won’t be able to sell it- or even tell anyone you have it. So the price will go up. In your dreams!

(6) Greece is going to default on it’s debt. That’s actually true. So will Ireland, Portugal, Italy, Spain, France, the U.K., the U.S. and the rest of the world.  We’ll all default on the IMF and the sooner the better.

Forget the Hype About NEEDING Gold – Here is What you DO Need

These are the things you need in order to survive for a month in a catastrophic emergency.  I’m not telling you to prepare for death. I’m telling you to think about what you need to live!

1. Food and water.  That’s simply not negotiable.
2. Shelter (a dry, warm, safe place to sleep).  Maybe that’s your house.
3. Sanitation and hygiene (a toothbrush and some basic knowledge – how to live without toilet paper for instance).  Have you ever thought about living for a week or a month without paper products?  Probably not and you probably can’t imagine it even now.
4. The ability to protect yourself.

The Bottom Line:

People sell you what makes you feel safe. Different people have different perceptions (That word again!). If you feel safe with a bag of silver or a bar of gold that’s great but understand the rules of the game.  You aren’t preparing for a monetary collapse.  You are PRETENDING to prepare for a monetary collapse which won’t happen. You bring your idea of precious metal to the table and I’ll bring mine, but all you need is just a tiny bit of personal responsibility and a plan to get food and water for a week.

*http://hawaiinewsdaily.com/2011/07/let-them-eat-gold-the-precious-metal-bubble/

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Editor’s Note:

• The above article consists of reformatted edited excerpts from the original for the sake of brevity, clarity and to ensure a fast and easy read. The author’s views and conclusions are unaltered.
• Permission to reprint in whole or in part is gladly granted, provided full credit is given as per paragraph 2 above.