GOLDBUG: The allure of gold in a fiat currency world

Friday, May 15, 2015

http://www.zerohedge.com/news/2015-05-09/russell-napier-explains-whats-store-gold-if-cash-outlawed

Russell Napier Explains What’s In Store For Gold If Cash Is Outlawed
Submitted by Tyler Durden on 05/09/2015 19:45 -0400

*** begin quote ***

However, in such a world, zero-yielding gold would be a high-yielding instrument. If the authorities ever sought to restrict access to banknotes, then gold would suddenly find itself enfranchised as money for the first time in many decades. So, given the scale of these competing forces, it is just too early to say what might happen to the gold price, but the allure of gold will grow the more it becomes clear that central bank fiat has failed and the age of government fiat is dawning.

The time is ever nearer when the price of gold will rise in an era of deflation. In due course, though no time soon, the full force of government fiat will engineer a reflation, albeit one replete with the misallocations of savings and capital so beloved by the bureaucrat. Then the PhD standard, in which the value of money is linked only to the words of the over-educated, will have ended. The gold price will rise even further, ‘And the words that are used for to get the ship confused will not be understood as they’re spoken, for the chains of the sea will have busted in the night’. And that’s ‘The hour when the ship comes in.’

*** end quote ***

Interesting change of the interest rate perception.

“Gold doesn’t earn interest.”

That was the common complaint. It just sits there. And, there is a negative opportunity cost.

Now for gold bugs like me, it’s insurance. 

The Gooferment can’t tax it when I die because it doesn’t exist.

The FED, the banking cartel’s, “man in the Gooferment”, can’t inflate it.

And, no one can track it.

With the FED’s zero interest rate policy — screw you senior citizens living on a pension and some savings —, there doesn’t seem to be quite the argument about not paying interest. Compare zero to, as Ric Edelman puts it, zero point nothing, doesn’t seem so bad now does it?

Also, when you think about Cyprus and their “bail in” solution that turns depositors into creditors of the bank, or worse shareholders with non-tradeable shares — think non-traded REITs, another of Ric Edelman’s “favorites” — gold doesn’t compare badly.

I go back to my two favorite … … examples.

  • In Roman times, two ounces of gold got a custom man’s outfit with cloak and sandals; today, those same two ounces translates to about 3,400 FRB “dollars”. Pretty equivalent.
     
  • And, in my yute, gas at the old Hess station was 30¢ a gallon with trading stamps, a glass, and the attendant pumped it — also cleaned the windshield; today those same three SILVER dimes could be sold for about 6 FRB “dollars”, which would buy more than TWO gallons of “better gas”, but no glass, stamps, or attendant (except in the Pepuls Republik of Nu Jerzee). Pretty equivalent. 

SO WHAT’S DIFFERENT?

The value of the currency!

Argh!

I’ll keep my nonexistent gold, silver, and nickels. Thank you very much.

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MONEY: Save all nickels

Saturday, December 15, 2012

http://lewrockwell.com/schiff/schiff190.html

Ditching Before the Fiscal Cliff
by Peter Schiff

*** begin quote ***

Turn on the TV and this is what you’ll hear: The US budget is heading for a fiscal cliff. If a deal isn’t reaching in Congress by the end of this year, a combination of automatic tax hikes and budget cuts will sink America into economic depression. There is no escape.

*** and ***

Those buying into physical gold and silver see this inevitability and are getting prepared. We believe there is no sense playing Russian roulette with our savings. Every time Washington raises that debt ceiling or announces another stimulus, it’s like one more click of the trigger.

*** end quote ***

OK, I get it. Everyone thinks I have a tin foil hat.

Talk to anyone who lived through the German pre-WW2 hyperinflation or the Great Depression. Or even the Carter inflation of the 70’s.

I get it. Buying Gold and / or Silver bullion is way out there on the lunatic fringe.

OK, how about accumulating “poor man’s gold”. Nickels?

If you won’t ask for a roll every time you go to your bank, then just don’t spend them when you receive them in change.

I have a couple of boxes on both my nightstands. If during the day, I get nickels in change I put them in my back pocket. When I get home, they go into the box and the “junk” goes into the “recycling bag”. (I take my change often anytime I go to the bank.)

Argh!

So here’s the gist of this money rant: (1) save all nickels; (2) consider buying bullion; but (3) don’t buy what you see advertised on TV. (Someone has to pay for the ads. Guess who? U!)

See you on the other side.

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