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Why Gold, Anyway?

February 4, 2009 by  

Why Gold, Anyway?

The simple answer is that the world order of paper currencies is coming to an end. People will not financially survive without exchanging their paper money for real money while there is some time left. This is not a new revelation. All fiat paper money systems in history have collapsed, and people who had no financial assets except fiat paper were left impoverished. Our present day fiat financial system is no different.

Many millions of intelligent people (by world standards), who have accumulated vast financial paper wealth, will finally lose it all. They are, in reality, no better off than the homeless or impoverished street people who live frivolous lives.

The fact is that most people just plain trust the system, and until they become alerted, they continue to make the wrong long-term choices or no choices at all.

Life is a crap shoot for most people, but I believe that those who have the mental capacity to think opposite of the crowd have an edge or advantage. Contrary opinion usually produces gains in the market and in life. But it is very difficult for most people to accomplish this. The reason is that our emotions get in the way.

So here is the key: When we feel emotionally negative about a stock, about gold or about life, this is a signal to reverse. And it is difficult. I have accumulated gold and silver since the last bull market blow off in 1980. All through the bad years, I knew gold would begin a bull market eventually.

The trigger signal to buy was the day that precious metals “‘experts” came out with very negative statements about the future of gold. What made the contrary opinion convincing is that these experts were hard money people. They were supposed to be hard core. When I read these reports, I began to buy gold and gold stocks the very next day. My contrary decision was on target.

I don’t ask you to be a market expert, but I do ask you to trust our judgment and that is, stay with the uptrend until it reverses at the top. Stay tuned and we will keep you informed. This correction will pass and the metals will blast off into the wild blue yonder. Stay aboard! By the time you read this, gold may be strongly up.

Bob Livingston

is an ultra-conservative American and author of The Bob Livingston Letter™, founded in 1969. Bob has devoted much of his life to research and the quest for truth on a variety of subjects. Bob specializes in health issues such as nutritional supplements and alternatives to drugs, as well as issues of privacy (both personal and financial), asset protection and the preservation of freedom.

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  • Case Elenbaas

    Dear Bob,

    I’m a retired person and have a hard time making ends meet my self. Sorry to hear that our veterans are treated as dirt. I’m so spitting mad about this, I can’t tell you. Sometimes I wonder if the rev. Wright had a point about cussing out America. What kind of country treat its soldiers the way we do. I’m campainig now to warn potential youn men about the treatment they will get when they enlist. You are used as fodder, that’s all you are good for. Sorry to sound so hars. But every time I see a veteran on the side of the road begging for money, I begin to think that Wright at it all right and we were just suckers.

    Case E.

  • Mung

    Dear Bob,
    Are you saying that if people don’t have Gold, they cannot buy because paper money will be worthless or not accepted. ?
    Thank you for the article too.

  • kim

    Gold? The book of Revelation tells us a bag of gold will not even buy a loaf of bread..Does anyone read the bible anymore..

  • Mark

    the bible is a collection of fables, that’s why people don’t read it any more.

    gold is just as much fiat money as the dollar is. who ever said that gold was worth anything? it’s a relatively worthless material. the only reason it was used so widely in the ancient world was because it was easy to press into coins. and it was shiny. the government told its people that the gold was worth something, and people started using it. that’s fiat money if i ever saw it.

    money is intrinsically fiat because there is no basis for value, person to person. you said in this article that the value of gold goes up and down relative to other currency, so why invest in gold instead of treasury bonds? investing in treasury bonds will actually help the country, whereas investing in gold will only devalue the dollar more. by encouraging people to invest in gold over the dollar, you are further devaluing the dollar, which is what you want, mr. livingston, since you have so much gold and silver laying around. what would happen if the dollar bounced back? all your gold would be worth less than what you bought it for and you would have lost money! i believe that it is the gold-owning people who are trying to devalue the dollar so they can have more money in the future, not because they think it’s a good idea!

    gold investment is a total pyramid scheme. the more people invest in it, the more you stand to benefit, mr. livingston. and when you cash out, all those people will lose money and you’ll be a millionaire (in dollars).

    • James

      Mark, that’s silly. Gold has intrinsic value it has always been used as a medium of exchange. The relative value of gold to other commodities remains fairly constant, thus a certain of gold will always buy a certain amount of corn or wheat, whatever the price of each is. The reason the price of gold goes up in dollars is not because gold has become more valuable, it’s because the dollar has become less valuable. A paper currency that isn’t backed by gold or silver is always inflated out of existence. The billions of dollars being spent into the U.S. economy by Congress was created out of thin air by a verbal vote. When that fiat money settles down on the economy, the price of everything will go up accordingly, including gold. But a certain amount of gold will still buy a certain amount of corn. It’s a storehouse of wealth that doesn’t change.

    • bruce

      Hi Mark,

      Sadly, you are wrong on all counts. The Bible (obviously, you never bothered to read it but learned what to think about it through others…) has proved its self over and over. I don’t have nearly enough room to answer that in this forum so you might have to do your own study there :) Secondly as to your theory about the Gold Pyramid, Gold has been used as money for thousands of years! What part of your brain tells you that is all going to go POOF??

  • Arthur J. Bryant

    A decade or two ago somebody tried to get me to “invest” in gold. I asked him how much interest does it pay. None. How much dividends does it pay. None. How about growth, does one ounce of gold turn into two ouces. No. Then this is no investment, it is speculation on how much some poor slob in the future will pay me for the gold.

    Were I to buy I would have to be smarter than the poor fool selling to me; and at a future sale I would have to sell to some poor fool who bought from me. Am I right twice in a fow, or wrong twice in a row, or right once and wrong once. With insurance, carrying charges, and tying up money that could have been invested, I have to be really fortunate to come out even or better.

    • Everett Vandervoort

      your reasoning is so delightfully deceptive. Quoting you: “how much interest does it pay. None. How much dividends does it pay. None. How about growth, does one ounce of gold turn into two ouces. No. Then this is no investment…”
      Your comments sound so neat in theory.
      I’m glad I didn’t know you or listened to you back a few years ago. I have been disabled for some 35 years. Even then I had a saying: “I don’t trust anybody… and besides, I’m a little paranoid.” No stocks and bonds for me – no ‘get rich quick’ or Barney Madoff ‘investment’ schemes – no 401k’s, Keogh or any other number-and-alphabet-soup schemes provided by our blundering politicians. I wanted to handle my own money.
      After learning the ins-and-outs of real estate I prudently bought some real estate (rentals) which today, after the crash in real estate, is still bringing in a positive cash flow.
      I also started buying a few 1 oz. coins at a time. I think they were about $200 each. No dividends, no multiplying of one coin into two, or three… You’re correct up to that point. However… you totally overlooked the most important detail: the horrendous loss of value of our printed monopoly money. Viz-a-viz worthless paper, gold did multiply in value – not just times 2, 3, or 4.
      Result of inflation (= the reckless printing of money?)
      That same coin I bought for $200′s is worth today $1,000… and going and going towards $2500 or more p. oz. Why am I sure about that? Because the value of the $ is falling off a cliff..
      My dear friend, think of savings as a store of value. NOT to be played around with, or ‘handled’ by a slick stranger with a slick suit and a slick business card.
      Use only a minor fraction what you can afford to lose, to try ‘investing’ yourself (And promise yourself not to cry over spilt milk… be prepared to lose; I did!)
      Keep the core of your savings in time-proven assets (and that is certainly NOT paper money (‘fiat currency’) or fancy certificates.) Gold is such an asset.
      I can only hope for you that at the end of the day you will come out as well as I did.

      • James

        Everet V, well said! I say gold will hit, at least, $2000 per ounce. But your one ounce coins did not increase in “value”, as you said it just takes more dollars to buy one. Back in 1933, gold was $25/oz., FDR confiscated everyone’s gold then started spending borrowed money into the economy and the price of gold went to $35/oz., but an ounce of gold back then still bought the same amount of staples that an ounce of gold buys today. FDR just confiscated 40% of everyone’s paper money purchasing power.

  • Marvin

    Arthur and Everett,

    Everett is right. Otherwise China, with massive reserves, would not be moving away from long-term treasuries of the US (a country with massive debt) and into gold as fast as it can acquire it.


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