The question of gold..

Yeah, and I keep tellin' ya that if you want to preserve wealth, you ain't gonna with $1,900/oz gold.  Apart from my estimate that a third of the bar stock in circulation is tungsten-filled, that is $19,000 for ten OUNCES of gold.  

Which is one acre of farmland or one mid-sized farm tractor or eighty Ruger stainless 10-22 rifles or 40,000 gallons of water catchment or a thousand gallons of crude oil or 5 like-new, certified-for-use 40'x9.6' Hi-cube steel shipping containers delivered to Hilo (or Kawaihai) or, if you could still get them, ten new, unfired, correct-grade M-1 Garands (which have increased in value at about the same rate as gold) or a chicken coop and 2,000 chickens which graze on coquis and produce up to 2,000 fresh eggs a day and sell (or barter) for about 40 cents per egg. That's a better return than PM is going to give you.

You can always sell a few egg-producing hens for ten bucks each but what can you buy with a $1,900 ounce of gold in a depression?  No one can make change and WTF would someone who is worried about food want with gold? 

I keep telling you that you can't use gold in an economic meltdown.  Even hinting that you have gold is like telling people you are a Mormon and have a years' supply of food and water in your house.  When the shit hits you will never be able to sleep again or walk around without constantly looking behind you.  Even then, someone will get you when you let your guard down for one second. Then the albatross is on their neck.  But if you had spent that $19,000 to start a microbrewery, everyone would be your friend and you could barter a bucket of beer for anything you need -  no one tries to steal a brewery. 

There is not enough gold and silver and copper and pearls in the sea to back the dollar anymore, so that's not happening.  It's a dream.  It isn't real.  Trade can't happen unless everyone has access to the same medium of trade, even if it's paper. Sure, fiat currency doesn't have any intrinsic value, but neither does gold.  It's just a place-keeper.  We can use anything as long as everyone has some of it.  Bottle caps, Confederate money, US dollars, it doesn't matter - but everyone has to have it and agree to use it.

The cognitive dissonance is believing that things WILL get bad enough to make gold worth $1,900 an ounce, in which case the 99% of people who don't have gold can't make change and don't want it anyway, or things WON't get bad enough to make gold worth $1,900 an ounce, in which case you are wasting your money because it is in a huge bubble which will burst.

Suppose everything actually does tank and the Internet goes away.  Five days later, what is your gold worth?  $3,000 an ounce, or $300?  And so what? How ya gonna sell it?  But a dollar is still a dollar.  What it will buy depends on supply and demand in a barter economy, but it's a standard that everyone understands and will keep using. Your gold bar is a paperweight at that point.

PM is going to tank.  No small investor manufactures anything at all, much less anything that needs silver or gold. Most people don't HAVE silver or gold.  It ain't practical unless you got into gold at $40 and silver at $8. Then you might have a cushion - but in order for that cushion to work you need to sell at the top of the market and no one will. People who own PM will always hold it until they HAVE to sell it to buy food and then the food purveyor sets the value.

Guaranteed, you bring a shiny silver dollar to me to barter and it's worth a dollar.  It's only worth ~$43 to people who are in love with the word 'silver' - and your uncirculated $20 St. Gaudens double eagle?  It's worth $20.  The entire purpose for issuing money is to create a standard - and that standard is Face Value. 

Remember, Grasshopper: PM has no intrinsic value.

 

This is from my friend who shall remain nameless - and faceless.  Hell, I have never even met the bugga. He's prolly an asshole. :-O

This morning I wrote this to a blog that was debating why the price of gold was rising and if it's a bubble ready to explode.  
 
Americans (most) have a cultural bias against gold. I believe this is due to their isolation geographically - isolation due to a short historical time frame - and the isolation from the rest of the real world because of American Exceptualism - Americans have psychologically rendered gold as a post modern barbaric relic. A glittery curiosity that is reserved for baubles for Mr. T and Rap crouch grabbing clowns.

  The rising price of gold certainly hasn't been from the increase demand from American investors, excluding GLD because it really doesn't count, which will become obvious in the future. In my personal sphere of experience, I have failed to influence anyone (gawd knows how I have tried) I know to seek security in owning physical PMs. Possibly it says more about what my friends and family think of me, but the fact remains, I see no one seeking refuge in PMs from an imploding fiat system.

  Most are psychologically invested in salvaging the status quo in some way - anyway. There is a collective cognitive dissonance in imagining a post US dollar reserve currency status amongst Americans. There is an American cult that believes the Federal Reserve note is the sole reality of what constitutes money. Americans have this mental imprint because everyone has invested in the system and has some serious skin to loose if it fails. This mindset will empower the culprits running the system and enable the continuing fraud in the banking industry, collaboration by government regulators, and if necessary, martial law. 

  The price of gold is rising because of the international insecurity based on the fact that too much debt creation has been created, which has allowed an imbalanced trade/currency regime to expand into a precarious bubble. All Central Banks around the world are increasing their reserves of gold while depreciating their currencies. This present fiat bubble system is floating dangerously close to some razor sharp realities that are brought to our attentions in the news on a daily basis.

  The future is what you invest in today.
xxx