Excellent interview David Morgan of Silver-Investor.com did with Cambridge House in Toronto this last weekend at the metals conference.
He says Silver is a monetary metal besides being an industrial metal. It is a preserver of wealth. Paper money is not a preserver of wealth at all. Expect volatility, but in the end it is going to preserve your wealth.
All money is ultimately backed by the credit of the nation and is only as valuable as it is deemed by consumers of goods produced by that country. Paper is intrinsically as good for money as silver or gold - better than silver since silver becomes more scarce the more it is consummed industrially and would therefore be more volatile as a currency. The problem with our currency is not that it is paper, but that it is managed by a criminal banking cartel and that people don't think there is any umph in the U.S. economy anymore (hence the credit of the nation, the backing for the Fed notes, is reduced).
ReplyDeleteGold has value because it is an actual, physical gauge... paper is just paper. Paper can be a grocery bag, a gum wrapper, toilet tissue, a Kleenex® and can be destroyed or manufactured very easily.... gold cannot. Gold cannot be counterfeited, it cannot be multiplied, it is easily identified. Everyone with half a brain can easily recognize these inherent values. Ye dont even need faith... it is what it is what it is.
ReplyDeleteIn previous gold standard systems, such a vastly fluctuating economy did not exist, because gold itself is not vastly fluctuating. Only by means of disastrous crises, such as war, did it waiver, in which Congress has the power to coin money and set the value of it as needed. Abraham Lincoln wanted to print interest-free money for the nation to use, as did John F. Kennedy, and for some reason, both of them ended up assassinated. Hmmmmm.
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Gold, silver, platinum and palladium are the primary exchange-traded investment precious metals. Each of them possess six inherent attributes in a special combination that make them unique.
These include:
Beauty – Precious metals are used in many ways to enhance appearances, as in jewelry, for table settings, and in many other decorative ways.
Utility – They are used in a multitude of industrial and technological applications, ranging from catalytic converters and computers, to aerospace and telecommunications equipment. In fact, our modern way of life today would not be possible if it were not for the existence of precious metals.
Rarity – Precious metals are hard to find, and difficult and expensive to mine and refine. On average, four tons of raw ore are required to produce one ounce of pure gold.
Indestructibility – Virtually all the gold ever mined since the beginning of time still exists in some form today. Precious metals are always being recovered in their existing forms, re-refined and used again and again.
Portability – considerable dollar value can be transported in a briefcase, suitcase, etc.
Inherent Value – the worth of precious metals is innate; that is, they do not represent something else that has value, as does a stock or bond. Precious metal is, in and of itself, naturally valuable.
No other elements known to man exhibit all these characteristics in combination, and thus, mankind has therefore always considered these metals precious.
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When you use paper currency you are placing a value on another persons mere "concept of value" You are using a thought as a means of value. When an investment in stocks, bonds, bank accounts, cash, business etc. is priced in US currency, you are really holding the "intentions of providing value" locked away in the thoughts of another mind. Metals are valuable because they are real... they are physical... ye dont need faith in anyones intentions.
On a gold standard, increasing the supply of gold depends upon the profitability of producing it, because you'd have to spend gold in order to extract it (on average, requiring four tons of raw ore to produce one ounce of pure gold)... and that limits "governments" power to resort to inflation. The gold standard determines monetary purchasing power independent of the ever-changing ambitions of political parties and the lobbying groups that buy them. This is not a defect of the gold standard; it is its primary excellence.