Posted on 02/15/2009 9:48:31 PM PST by TigerLikesRooster
In times of crisis, never forget the value of gold
The dollar is simply a piece of paper. Gold is a much better store of value and is the best insurance against future shocks
William Rees-Mogg
Last week was a bad one for bank shares; after the HBOS £8.5 billion loss, Lloyds shares fell by a third and other bank shares fell as well. Yet it was a very good week for the gold price, which closed on Friday at $935 an ounce, after reaching what was nearly a seven-month high of $953.30 on Wednesday.
Barclays Capital commented that gold prices were resuming their long-run bull trend after eight consecutive years of gains. For longer than the past eight years I have been arguing that investment in gold is an essential insurance against financial shocks. Last week was a classic example. Respectable British bank shares have now fallen by up to 90 per cent, while the gold price has risen by more than 200 per cent since Gordon Brown began selling the Bank of England's gold reserve.
I have been following the gold price since I published The Reigning Error, a short book on inflation, in 1974. I have not consistently advised people to buy gold - like all other assets, gold can become significantly overvalued, as it did in 1980. However, I have found that the movements of the gold price are one of the most useful pieces of evidence about the health of the world economy. Mr Brown's sale of gold was an avoidable error. My friend the MP Peter Tapsell repeatedly warned him in Parliament not to do it.
(Excerpt) Read more at timesonline.co.uk ...
....The dollar is simply a piece of paper....
More precisely, the $$$ is but an electronic blip on a hard drive. The paper is a representation of that blip that enables off ledger transfers.
Gold is a refuge. Some may seek comfort and return to gold by trading blips for the age old standard
“So how do I know gold isn’t in a bubble or overpriced right now?”
Answer this question to yourself — Do you believe a bankrupt government would resort to the printing press to prop up the illusion of a functioning economy as long as possible and postpone the day or reckoning? Would a desperate government attempt to pay down debt using new money that cost nothing but ink? If you think so, then know that gold will reach astronomical heights in inverse relation to the dollar’s value.
The government will run the printing presses night and day to inject new money into the economy. The dollar’s value will be diluted unto worthlessness. Think of the Weimar Republic or Zimbabwe.
Debasement of money is a favorite tactic that goes back thousands of years — don’t you believe the current corrupt politicians are above doing it.
Hi: I went to website but could not figure out which old silver ones were priced at $12.50. I am a precious metals newbie. Any assistance would be appreciated. Thanks!
Fearing the worst, stocking up on goods that can be "bartered" is advised.
Think small bottles of Bourbon...etc. The street value on booze should be good for gold or food.
sw
LOL. I can't use the web site either. I just go to the store to look around.
Coffee, chocolate and probably sugar will eventualy be good ones to barter too.
Gold bashers won’t like this comment.
There are no dividends, but at least it doesn’t evaporate like my mutual funds have the last few months.
new money that cost nothing but ink?
That’s the expensive way. Today they just keep pushing the Zero key on the computer. It’s,much faster, and cheaper.
Friday I bought old US silver (90%) dollars for $12.50 each.
Go to the http://catalog.usmint.gov/webapp/wcs/stores/servlet/CategoryDisplay?catalogId=10001&storeId=10001&categoryId=13238&langId=-1&parent_category_rn=10191&top_category=10191 and buy your silver in the bag.
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