So this morning, I woke up to an email forward from someone that used to be a client. The forward was an anti-gold rant from a sell-side (Wall Street) broker who will remain unnamed. The piece was so biased and ridiculous I took the time to write a somewhat lengthy response. I am not going to include this person’s message since it is the property of his employer, but you can tell his arguments based on my answer. Hope this helps anyone that feels the need to make the bull gold argument cogently to a sheeple should you run into one in the wild.
My email:
Only someone on Wall Street could write something so foolish. It is so easy to pick this guy’s arguments apart it is not even funny. First, he claims gold has no intrinsic value. I’d love for him to define what “intrinsic” value is? So let’s say a painting is just a piece of canvas with a blue solid image on it. It may look like nothing or garbage to me but others may see brilliance and pay $5 million for it in the market. Because I look at it and see junk does that mean it has no intrinsic value? Gold has been the money of Kings for 5,000 years and even in the “modern” world it remains the asset people gravitate to as a store of value. I’d say having high value consistently for the entire span of human civilization gives it intrinsic value. It has value as alternative money and a store of wealth. That is the value of gold. Also why are regulators considering making gold a Tier 1 asset if it has no value and is archaic. See here. Finally, no one put it better that the fiat pimp himself Alan Greenspan in his article “Gold and Economic Freedom.”
Also, Warren Buffett’s own dad, Congressman Howard Buffett, did the same in this piece, “Human Freedom Rests on Gold Redeemable Money.”
He also claims that “gold is the ultimate market scam.” Really? Well all of the governments of the Western world and financial media discourage gold at every step of the way. Capital gains are taxed at income in the U.S. as a “collectible” to make it less attractive versus paper assets. Yet still people go to it and buy it. Further, the U.S. basically makes the whole world use the dollar with a gun to its head. Is this guy really so naïve that he doesn’t understand the entire war/aggressive posture of U.S. foreign policy in the Middle East is solely to preserve the petro-dollar (make people use it to pay for oil and commodities). So what is really the scam? Would he really rather put $1 million U.S. paper dollars in a chest and bury it and leave to his great grandchildren or $1 million in bullion? For someone that questions gold he doesn’t question digital money that can be and is being created in infinite amounts at the whim of mere mortals who think they know what they are doing? What a joke.
He seems to imply that the anti-gold rants of Indian officials as of late are bearish. I couldn’t disagree more and see it as a bullish sign. They are freaking out! Governments hate gold because it is a sign of no confidence in them. Then they act like petulant children to ban it. So what is the scam really? In any event, people already think China will overtake India in gold buying. They will buy every ounce India doesn’t want. India’s drop in demand has been in large part related to the rupee crash? Does he think it will crash further? What if it rallies?
Just look at the relationship of U.S. debt levels to the gold price. Very strong relationship. It makes sense since when the debt becomes terminal two options are available, default or massive inflation. Both are good for gold since both are bad for the dollar’s standing in the world.
Finally, he should put his money where his mouth is. To write such a vehemently negative piece on gold, he should personally be willing to put a major short position on with HIS OWN MONEY. I challenge him to do so. I have most of my money in precious metals so at least I walk the walk. I would love to see him do the same with a short position. But of course he won’t because he is just spouting, like all the others, when people like me are actually playing for keeps. Would love to see him do that into the seasonally strong period we are entering. I’m also curious as to whether he has been a bull for the last twelve years on gold when it has rallied from $250/oz to $1,620/oz currently. If he never saw the trade in the first place why would anyone care what he thinks of a asset that he admittedly “always has struggled with.” You’re still struggling pal.
More Wall Street toilet paper.
Best,
Mike
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Very well said. His argument has to be the way it is so he can continue to recommend equities etc to make commissions and maintain his livelihood. Bullshit from Wall St and Govt to maintain status quo and fool sheeple into the confidence game of fiat paper currencies.
Gold and silver bullion is a great investment. It has worked well for 5,000 years and will do well for the next 5,000. Paper money is just paper. Gold is real money. Check it out at http://www.CherishedGold.com Thank you for the post.
Most of gold’s critics benefitted from Tarp the most!
TARP Was Even Worse Than You Think: “An Abysmal Failure,” Barofsky Says
http://finance.yahoo.com/blogs/daily-ticker/tarp-even-worse-think-abysmal-failure-barofsky-says-161743679.html
I am sure he has heard, “He who owns the gold makes the rules”. The money of kings . I wonder why central banks are trading their fiat currency in and buying gold. He is simply hanging on to the illusion of wealth the the banks and Wall Street have fed to the sheeple since 1913. The Federal Reserve, Wall Street and the politicians have been in bed with each other for quite some time. The Banksters day of reckoning is drawing closer with each passing day.
Left the equities markets completely right after my IBM buy during the “Flash Crash” was negated. I had been buying metals before, but that day cinched it for me. Watching the Wall Street pimps and who’es selling their snake oil is now almost piteous. They are so desperate to con the suckers back to the table that even a whisper of something not horrible is enough to have them all clamoring that everyone should get back in the pool. What a joke. The Buffets and TBTF’s of the world are all synched in to a game where they deal, the look at every card, and then decide who’s gonna lose next. Why would anyone want to play. So if ya do, and the market miracle happens where you manage a 10% return… what’s the point if the Bernanke has jizzed another 5 or 10 or 40 trillion out the back door to prop up the Euro, Barclays, or whoever. The likes of the Bernanke and his accomplice Diamond are busy manipulating the silver markets and every sovereign nation with a shot has been steadily buying more gold. Yeah… no intrinsic value my backside. Don’t even turn them on, unless there’s nothing else funny to watch.
A discussion about Lincoln’s Greenbacks might be in order at this juncture.
There is no vested interest in banks, most financial media, brokers to ever recommend gold. Thats the main argument-they cant make money out of it via citizens. They only have paper promises.
I think when paper dies, people may look to gold and silver, but most people will not be able to find any. So it will move to resources or people will come up with new kinds of paper. I bet services and resources will become the currency of the masses if there is a collapse.
“Whither Gold” by Antal E. Fekete has got to be one of the best arguments for gold’s value. Reading this was one of my strongest “waking up” moments.
http://www.scribd.com/doc/81329259/Whither-Gold
I have variously read that the Fed holds somewhere between 45 and 55% of our total National Debt, so let’s do an Iceland; throw the crooked shits in jail and tell the share holders of the Fed to pack sand… what are they gonna do, repo the White House. Hell they can have it, along with everybody in it and Congress too. Maybe make them the indentured servants to work off the rest, although I’m still much more in favor of putting them all to the guillotine… face up, or at least a good ol’ fashioned bare ass Malaysian caning with a piece of split bamboo – we can make it a pay per view! What can I say… some think me a bit extreme.
Our debt based scrip was DOA from the start. It’s just that now that the Bernanke, et al, have resorted to Wiemar Republic style last gasp pixie dus,t that inflation that we’re still told isn’t really inflation, is overwhelming the serfs. The Arab Spring wasn’t about any bullshit democracy or Islamic radicalism, it was much, much simpler than that. Thanks to America’s economic hegemonist policies, people couldn’t afford to eat. The sheeple will tolerate anything… right up until the point where they have to look at their kids and say “sorry, no gruel today”, that’s when the SHTF.
The rulers are now just lining up the patsies so when it all does finally crumble they can offer to save us from the chaos. All we have to do is relinquish our last bit of freedom, accept their new fiat scrip, and buy the rest of the way in to their Fabian Fascist NWO.
The end is nearer than even they considered possible. Join or start a barter club. Grow your own food and buy some chickens (they got my grandmother through the last Great Depression). Don’t buy stocks, buy quality tools, ‘cuz in a world where nobody makes anything, the guy that can help people fix, repair, re-use and wear out old shit is gonna be in demand. There are hundreds of millions in the U.S. alone that can barely survive with the gubmint holding their hand and wiping their arse. What do ya suppose will happen when they go to the mail box and their welfare check won’t buy a loaf of bread? Just being able to read the writing on the wall ain’t enough. You need to prepare for the worst and hope for the best. Potable water, food, clothing, and shelter – those are the new currency when the reset button finally gets hit. Nobody’s gonna give a rats arse about the latest I-phuckphad when they can’t afford or find any food. Priorities tend to shift very rapidly.
Read up on life in Germany after the Treaty of Versailles. Nock’s “Myth of a Guilty Nation” is a great, short eye opener not just about the realities of hyper inflation, but also regarding the real causes and initiators of WWI, which of course led to WWII, the turmoil in the Middleeast, the ascendency of fascist socialism, and their silent partners – the central banks. Hyak’s “Road to Serfdom” is another.
Nothing new here. It’s all been said and pointed out before, many times quite boldly by the scoundrels themselves. People will not learn or listen until they have the constant reminder of hunger gnawing at their gut day and night. The people of China and Russia weren’t looking for any particular type if new and improved gov’t, they just wanted to eat and not have to worry about getting killed while they worked to accomplish that. It’s all pretty universal and hasn’t ever really changed much. Whether religious cons or political ones, there’s always somebody with the nerve to step up and start offering people free shit and promising them everlasting life and rainbows… and the people just gobble it up.
Some faves and classics:
“Banking was conceived in iniquity and born in sin. Bankers own the Earth. Take it away from them but leave them the power to create money, and, with the flick of a pen, they will create enough money to buy it back again. Take this great power away from them and all great fortunes like mine will disappear and they ought to disappear, for then this would be a better and happier world to live in. But, if you want to continue to be the slave of the bankers and pay the cost of your own slavery, then let the bankers continue to create money and control credit.” – Sir Josiah Stamp, President, Bank of England (2nd richest man in England)
“Capital must protect itself in every way. Debts must be collected, mortgages foreclosed as rapidly as possible. When through the process of law the common people lose their homes, they will become more docile and more easily governed through the strong arm of government applied by a central power of wealth under leading financiers. People without homes will not quarrel with their leaders. This is well known among our principal men now engaged in forming an imperialism of capitalism to govern the world. By dividing the people we can get them to expend their energies in fighting over questions of no importance to us except as teachers of the common herd. It is thus by discreet action we can secure for ourselves that which has been so well planned and so successfully accomplished.” – U.S. Banker’s Association Magazine, 1924
“Every circulating Federal Reserve Note represents in actuality a one dollar debt to the Federal Reserve system.” – Money Facts, House Banking and Currency Committee
“For a long time I felt that FDR had developed many thoughts and ideas that were his own to benefit this country, the United States. But he didn’t. Most of his thoughts were carefully manufactured for him in advance by the Council on Foreign Relations One World Money Group. The United Nations is but a long range, international banking apparatus clearly set up for financial and economic profit by a small group of powerful One-World revolutionaries, hungry for profit and power. The One-World government leaders and their ever close bankers have now acquired full control of the money and credit machinery of the U.S. via the creation of the privately owned Federal Reserve Bank.” – Curtis Dall, Son-in-Law of F.D.R., 1936
“For more than a century, ideological extremists at either end of the political spectrum have seized upon well-publicized incidents to attack the Rockefeller family for the inordinate influence they claim we wield over American political and economic institutions. Some even believe we are part of a secret cabal working against the best interests of the United States, characterizing my family and me as ‘internationalists’ and of conspiring with others around the world to build a more integrated global political and economic structure – one world, if you will. If that’s the charge, I stand guilty, and I am proud of it.” – David Rockefeller, Memoirs, 2002
“If the people were to ever find out what we have done, we would be chased down the streets and lynched.” – George H.W. Bush to White House reporter Sarah McClendon, 1992
“In the absence of the 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. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves. This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the ‘hidden’ confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights.” – Alan Greenspan, Gold and Economic Freedom
“It may appear that what goes on is happenstance, but the government most surely has planned it.” – Franklin Roosevelt
“Neither paper currency nor deposits have value as commodities, intrinsically, a ‘dollar’ bill is just a piece of paper. Deposits are merely book entries.” – Modern Money Mechanics Workbook, Federal Reserve Bank of Chicago, 1975
“Our goal is gradually to absorb the wealth of the world.” – Cecil Rhodes, “The secret banking cabal”
“Only the small secrets need to be protected. The big ones are kept secret by public incredulity.” – Marshall McLuhan
“One of the saddest lessons of history is this: If we’ve been bamboozled long enough, we tend to reject any evidence of the bamboozle. We’re no longer interested in finding out the truth. The bamboozle has captured us. It is simply too painful to acknowledge – even to ourselves – that we’ve been so credulous.” – Carl Sagan
“Permit me to issue and control the money of a nation and I care not who makes the laws.” Mayer Amschel Rothschild, founder of the Rothschild international Banking Dynasty, 1790
Sorry for the cathartic TLTR. It’s like therapy to keep me from climbing a tower with a high powered rifle (figuratively of course).
Despite written or even published statements, “the gold hater” may in fact own gold or silver. Many of the paper/digital money paradigm people see the writing on the wall, and are protecting themselves. Adding hypocrite to their curriculum vitae — why should they care?
Exactly. The German/Judeo > Anglo/Judeo banking dynasty the Rotschield’s family (anglicized at ‘the Rothschilds’) was notorious, from the era of Napoleonic wars forward, for carrying a duplicate set of books (one for the regime, and an accurate set for themselves), as well as for having underground gold vaults at every one of their major homes or palatial manors. Due to the secretive and clannish nature of the family’s inheritance contracts, this gold has never been audited (and thus escapes inheritance tax). During war years – when a country’s credit and ready cash have all been spent – the only “money” foreign producers and bankers will continue to accept, is gold bullion.. this is the REAL “reserve money” that should be behind every bank and national treasury. The very people at the apex of the global financial system – the hyper-wealthy, in particular, those at the Bank of England, the so-called ‘Federal’ Reserve, and those who own & run the LBMA – London Bullion Market Association – all own the most gold… but it is they, through their hired hands in the press/media and academia, who ‘dis,’ bad-mouth, and denigrate gold as a store of value for ‘the wee people” !
That’s why I already pulled all my money out of Wall Steet, a bunch a A hole lying and stealing other people’s money to enrich themselves any way.
Great mike, you found the right words to explain What i tought. I recently suggested my mother to buy some jewels instead of buying anything on the mkt.
Well said. I still remembered when my “financial planner” told me “don’t buy gold as it will drop in value” when gold was trading at about USD800…I have not speak with him about investing in gold ever since…
You should say to your financial planner to drop dead and transfer your business somewhere else. These people do not get it.