Pet Rocks and Tradition
Since gold is not money (aka Bernanke at 5:01
How I see it.
GOLD ATTRIBUTES
Why Gold is valuable
Bill Gates:
Gold holdings “just sit there and don’t do anything”.
Charles Munger:
“Gold is a great thing to sew into your garments if you’re a Jewish family in Vienna in 1939, but I think civilized people don’t buy gold, they invest in productive businesses.”
Why all of recent do we hear from two of the wealthiest men in America that holding Gold is merely “psychological and uncivilized”?
Although most ordinary citizens could care less about metals, the reality is that gold has a lot to do with the value of our currency. Historically, gold has been treated as money, contraband, illegal tender (1933) and as a silly non-interest earning investment. Funny how gold has been the best performing asset class in the last 12 years!
The precious metal remains the “currency of last resort,” according to analysts led by Jeffrey Currie
http://finance.yahoo.com/news/goldman-stands-gold-rally-forecast-084408689.html
Why all of recent do we hear from some of the wealthiest men in America that holding Gold is merely “psychological and uncivilized”? Could it be because gold is a Basel III Tier 1 regulatory capital asset with supreme collateral status over foreign currencies?
Plug in the numbers:
Oz’s of Gold Held by US
x $ Price of Gold
= External Debt
“In the absence of a gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good and thereafter decline to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as claims on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to be able to protect themselves.
This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.” — Alan Greenspan, ‘Gold and Economic Freedom’ in 1966.
Gold is the money of kings, silver is the money of gentlemen, barter is the money of peasants – but debt is the money of slaves.”
–Norm Franz, Money and Wealth in the New Millenium
, it might appear from the Federal Code of Regulations that Gold and Silver really is money! Who would have thought!
Federal Regulations
Readily marketable collateral means insured deposits, financial instruments, and bullion in which the lender has a perfected interest. Financial instruments and bullion must be salable under ordinary circumstances with reasonable promptness at a fair market value determined by quotations based on actual transactions, on an auction or similarly available daily bid and ask price market. Readily marketable collateral should be appropriately discounted by the lender consistent with the lender’s usual practices for making loans secured by such collateral.
The world is now waking up to the fact that gold is not a commodity, but currency with many functions such as performing insurance, liquidity, store of value.
Gold is not only currency, but it takes on a higher status as MONEY.
Contrary to Wall Street Journal editors, Gold is not merely a Pet Rock.
It's also really important for everything from Computers to Space Travel.
If the banks take a holiday and your money is tied up. You can always use your gold. Gold is a good form of protection if a currency collapses.
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