Sunday , 19 May 2024

Gold: Crash? What Crash?

“What crash?” Gold is still up almost 500% since 2001.  How does the S&P and Dowgold compare over that timeframe?  Better yet, how about Apple stock?  There is no other investment sector/space as they like to say these days, which can come close. So again I ask “What crash?”

So says Arnold Bock in a guest editorial presented compliments of Lorimer Wilson, editor of (A site for sore eyes and inquisitive minds), (Your Key to Making Money!) and the Intelligence Report newsletter (It’s free – sign up here). You can also “Follow the munKNEE” daily posts on Twitter or Facebook. Please note that these paragraphs must be included in any article re-posting to avoid copyright infringement.

Bock goes on to say:

The only real money is gold and silver bullion, and not the paper variety either.  Notice that these prices are determined by the futures market COMEX and London Metals Exchange?  The amount of naked shorting a week ago Friday and this past Monday represented almost an entire year of production of the real thing.  Nothing more than fraudulent and fabricated paper was being bought.  Incidentally, when they have to go long to cover their shorts there should be a nice bump up.

Another interesting reality is that these new lower prices provided a tremendous opportunity for the regular buyers of the bullion and not only Asian…many non North American and non European Central Banks…to stock up on the metal at new and temporary discount prices.

Which would you rather bet on?  Federal Reserve Bank Note paper or any other paper currency backed by nothing and being deliberately trashed in many rounds of competitive currency devaluations by perpetual QE to infinity…or gold and silver bullion?  I think you know my answer.

As long as the investor isn’t buying on margin and doesn’t need his investment to provide a consistent return so he can continue to live each day, there is no need to have a dividend type of return or indeed a guaranteed and predictable and scheduled capital gain.  I will take PM bullion  any day.

One more thing…there will come a day when certain governments and central banks will want high priced precious metals.  Why?  Because those countries which own the largest amounts will become relatively richer and more powerful AND high gold prices will also have the effect of devaluing paper currencies in relative terms.  That means that governments can pay their obligations to their citizens and bond holders with cheaper nominal dollars, etc.  It is their only choice other than to declare insolvency since they can’t grow their economies enough to tax enough to meet their obligations.  Once interest rates rise and start to equal the real rate of inflation, the reality as we know it today screeches to a halt.

Best of all, high priced gold can be blamed for everyone’s cheaper currency and lower living standards, especially when some basket of trade weighted currencies topped by a substantial dollop of gold for credibility purposes and which is managed by the IMF or some such multinational group, replaces the US dollar as the worlds new Reserve Currency.  Every national government will then have a ready made whipping boy and scapegoat for their sorry national currencies, sagging economies and lower living standards.

The only other thing that could compete as a scapegoat would be and could be a series of armed conflicts in which flags and patriotism distract the masses from the real issues.

To end, I will offer a bet, using a five or ten year forward time horizon, that gold and silver bullion will be a far superior store of value and/or asset insurance policy than the DOW or S&P.

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