Gold isn't "going up," and gold isn't "going down." It's gold. Gold is gold.
You've heard it all before:
'Gold is going to $5,000 an ounce!'
'Gold is going to $50,000 an ounce!'
'Gold is going to infinity!'
When?
'[Insert next calendar month]! The dollar collapse is coming!'
Yes, the collapse of dollar seems imminent, but for now let's ask some other questions:
Why isn't gold $5,000 an ounce?
Why isn't gold $50,000 an ounce?
Why are we talking about gold? Why does gold have a "price?" If gold is so important, why don't we use it?
If one could exchange 50,000 Federal Reserve Notes for but one ounce of gold, what would the seller of the gold gain from holding dollars? A "capital gain?" Would you argue in one breath that the value of the dollar is falling, and argue in the next breath that the holder of gold "gained" by exchanging gold for the falling dollar?
All these questions and more are answered in volumes of weekly posts at Monetary-Metals.com. There, Keith Weiner explains all I've ever truly learned about gold and it's place in the world. Absolutely none of it has to do with the London Gold Fix, hedging against inflation, or "investing in gold." It's all about answering these questions, plus the most important question: How can we make gold circulate as money again (and thus avoid financial Armageddon)?
I owe near-absolute credit to Weiner for what I write in this post. I'm just summarizing my understanding, hopefully steering you in a new direction before you head over there.
GOLD HOLDERS DON'T GAIN
Let's take a look at a plausible scenario:
The value of the dollar falls by 98% (again). Meanwhile the buyers of dollars change from bidding one ounce of their gold for $1,000, to later bidding one ounce for $50,000 (98% less). The seller of gold "gains" the priviledge of paying "capital gains" taxes for what is at best a break even in dollar terms, and squarely a loss in gold terms--he no longer owns the metal. Not to mention, holding dollars, he is now a creditor to parties who will never repay.
What was the advantage to the holder of gold? Up until the moment he sold it, his money was his--nothing less and nothing more. An ounce was an ounce.
PURCHASING POWER IS FOR BUYING STUFF
Many are undoubtedly excited by the prospect of something like the above scenario. Yes, even if the dollar is worth less, the purchasing power of gold will likely go up, they might say. Indeed. As written at Monetary Metals this week, such an advance in purchasing power doesn't make one wealthy. Because spending money doesn't make one wealthy, production does. Eating the seed corn, or spending gold, is only capital destruction. So you own metals--great. No need to lick your chops over purchasing power--the world that comes with it will be ugly enough to make you poor.
WHEN SHIT HITS THE FAN...
Yes, but what kind of shit are we talking about? There are many obstacles in the way of gold circulation today. Manure on the blades isn't going to magically remove the obstacles. And the obstacles are the real problem, the source of the feces.
Our alleged monetary system is a debt system. Remember Mr. Morgan above? The system has nothing to do with gold, and it can't have. The options are gold and silver, or irredeemable paper, not both. The period between 1913 and 1971, in which dollars were defined by gold (not gold defined by dollars!) was a period of psychological conditioning for the common man, and of self-delusion or maniacal waiting by economists and central planners, until the time when everyone would swallow the divorce of currency from gold.
Today, the military is funded by corporate taxes, interest on the treasury debt is partially serviced by the sum of voluntarily paid personal income tax (1040) revenues. The rest of the national debt, which totals around $100 trillion when accounting for unfunded "entitlements," is simply the product of a self-referential loop of dollars issued, lent to banks, invested in bonds, which is allows the government to do what?
There you have it. The shit hit fan in 1913. Only now are many of us smelling it and noticing the specks on our faces.
Yes, you're better off owning gold than not, especially when the system does collapse... It will. It's made for that. But it's going to take a lot more than such a failure to make gold retake its place as THE currency, as rightfully known as money. It's going to take courage. And INTEREST.
REAL GAINS
Currently, gold offers no productivity...
What's the argument against putting dollars under your mattress? That inflation will rob you blind?
The subtext to the story of industrialization is honest lending--the PRODUCTIVE deployment of capital from those who have it to those who pay to use it. Pay what? Pay interest.
But, for a dark stretch of time, charging of interest was illegal--dirty usury. Today the charging of interest is making a return to that sort of status.
The acceleration of government indebtedness requires falling interest rates. Savers no longer accrue interest, actually lose instead of save. That self-referential cycle of the dollar is becoming a noose, choking the life out of the country's productive capacity.
What could turn the tide? Return interest to real money.
Keith Weiner wrote extensively about this here: https://monetary-metals.com/gold-bonds-averting-financial-armageddon/
It is our one and only way out of the mess we're in.
Until then, Monetary Metals is offering a return on gold, paid in gold. "Unlocking the productivity of gold," they say. No, they're not paying me. (But I wouldn't turn down a piece of silver, Keith! :P)
Hopefully, you'll look into these links. Hopefully you've already seen that there's much more to gold than William Devane commercials and doomsday prepping. Gold is money.
Monetary Metals Topics
Latest report, including PURCHASING POWER: https://monetary-metals.com/gettin-high-on-bubbles-report-15-apr-2018/
CAPITAL DESTRUCTION: https://monetary-metals.com/a-picture-of-capital-destruction-in-germany/
GOLD MARKET MANIPULATION: https://monetary-metals.com/keith-weiner-on-capital-account-gold-and-silver-manipulation/
YIELD PURCHASING POWER:
