In describing the Garden of Eden, the Bible says, “A river flowed out of Eden to water the garden and there it divided and became four rivers. The name of the first is Pishon; it is the one which flows around the whole land of Hav-i-lah, where there is gold; and the gold of that land is good.”
Gold is the first metal mentioned in the Bible; before iron, silver, copper, or even stone or sand. It is the first inorganic material specifically referred to by name. A short trip down the road from paradise to the gold mines? Gold was used as a primitive “money,” value, or a store of value, long before coins and bars were even thought of, in other words. Gold beads have been found in Sumerian excavations, dating back to 4000 BC. Egyptian sculpture and reliefs have been found, which picture gold mining and forming, dating back to about 3000 BC. Pharaohs and other Egyptian royalty, insisted on having gold placed in their tombs, and when King Tut’s tomb was uncovered, his remains were encased in a casket of solid gold, which weighed in at 2400 pounds. At today’s gold prices, that casket had over $14 million in gold. That gold still exists, as does virtually all gold ever mined.
But getting back to history. The Babylonians, were probably the first civilization to use gold in a monetary form, by making the “Shekel.” This was about 2000 BC. The Shekel wasn’t a coin, but a sort of ingot, and weighed in at today’s measurement of 8.34 grams or about a half ounce troy. The Shekel, as a method of fixing price and value, was probably responsible for Babylon’s commercial success in the ancient world. The Greeks invaded Armenia about 1200 BC, and stole their gold, which they had gotten by panning, just as the 49ers did in America. The Lydians occupied what is now south-central Turkey, and although their empire was short lived and small, it has been described as a wealthy industrial empire. The Lydians invented dice, and coins, without which Las Vegas would cease to exist. The Lydians, in 700 BC, established the first mint, so that ruler Gyges could place his royal seal on lumps of gold. It was Lydian King Croesus (560-546 BC) who made the first “coins,” and these were not exactly like Gold Eagles. They were bean shaped lumps of gold, with the heads of a lion facing a bull on them. Crude, but effective.
In the succeeding 25 centuries, billions of coins and bullion bars have been struck out of gold and silver. Why gold and silver? Because they are items of enduring value, and have been recognized as actual money, for literally 5,000 years.
Gold is a beautiful and noble metal, and its luster and deep yellow color, have proven irresistible for thousands of years. Gold is a most indestructible, ductile metal. A single ounce, can be drawn into a wire 35 miles long without breaking, or it can be hammered into a sheet as little as 1/250,000 of an inch thick. It is heavy; and a cubic foot of gold weighs more than half a ton. Gold is totally immune from the effects of oxygen, and will not tarnish, rust, or corrode. Gold coins, which have lain at the bottom of oceans for 2,000 years, upon recovery, have been found to be as bright and beautiful, as the day they were minted. Gold is expensive, hard to mine, has to be worked for, and capital expended to obtain.
Lenin, is said to have predicted that the free world will eventually self-destruct, by debauching its own currency. He was an astute observer of history, because that’s the way it has always happened. Engravings on pieces of paper, bookkeeping entries, promissory notes, and other pieces of paper with ink on them, are abstractions. Abstractions, which are like soap bubbles. They can be popped, and when this is done, nothing remains. The word “fiat” means not “fake,” but an “order.” In other words, a government orders the use of its pieces of paper with ink on them, to be used for “money,” or to conduct trade. “Fiat money,” then, is the same as “legal tender,” meaning it must be used in commerce. Governments issue “legal tender laws,” simply because they have a fear that its citizens may resort to other means of carrying on trade, and if that happened, governments would be unable to print what they need to satisfy their wild spending orgies.
A friend of mine in Montana, has gas wells on his property. He sells the gas, and it eventually ends up in pipelines serving people who use natural gas. The gas company used to give him free gas, as a sort of freebie for his assets being available to them. There were gas heaters everywhere on his property. Since it was free, who cared? Now the free gas is gone, and it is metered. Guess what? No more using gas everywhere, with nary a worry, because it was free. Like the rest of us, when there is a cost, the consumer is careful with use. Government is no different. There is no cost to endless printing of currencies to pay bills, and reckless spending to keep political hacks in office. Politics is what it is all about. If no one had to be elected, it is doubtful that there would be legal tender laws, unbacked currencies, and the mess we now find ourselves in, with inflation threatening to become hyper. The Constitution gives government no permission to subsidize anything. Yet, be it the “economics bill,” “farm bill,” or any “bill,” all are about subsidies. Unconstitutional subsidies. Subsidies, which cause the money supply to increase, with resulting inflation. Currently, the federal government is spending as much as it did at the height of the Viet Nam war, and it is going higher by the day.
Silver
I am often asked about the COMEX silver, and silver in general. We know there are about 350 million ounces of COMEX “paper silver” in existence, in the form of contracts to pay on demand. Most, simply turn over their contracts, and never take delivery of the physical silver. The COMEX, has about a third of the silver it has agreed to deliver on demand. The rest is imaginary. Suppose everyone decided to take delivery? It would require a lot of dollars to do so, because contracts for 5,000 ounces of silver, would have to be paid for, in order to deliver. But just imagine what would happen to the price of silver, if COMEX contract holders all said, “I’ll take delivery.” After the third on hand left the vauts, the COMEX would have to buy maybe 200 million ounces of silver, to satisfy contract holders. I can see the price of silver going back to a ratio of 16 to 1 or even better. If Richard Russell’s potential of the Dow and Gold crossing each other at 3,000, and the ratios between gold and silver went to the historic and 1980 ratio of 16 to 1, the price of silver would be $187.50 as gold went to $3,000. It could happen.
Far more silver is being consumed, than is being produced, and that is an absolute fact. The US government has none, but buys it on the open market to make its Silver Eagles. In my opinion, it has no gold either. The gold it supposedly has stored in New York, is listed as being held by the government, not owned by it, and I am certain Ft. Knox is as empty as a rattling gourd. There are millions of ounces of gold held by central banks and government treasuries around the world, and these are sold on occasion, in a feeble attempt to keep the price of gold down. It never works, and as the price of gold goes up, these governments are less inclined to sell their one remaining thing of value, for empty pieces of paper with ink on them. I do not think the thousands of tonnes of gold held, are a threat to gold’s continual rise in price. Silver’s potential is enormous. Absolutely enormous. If you have room to store it, the ratios simply must go down from their current 75 to 1, meaning silver’s potential rise, percentage wise, is greater than gold. Protect yourself.
As a slight commercial, I have a few thousand, colored, beautifully packaged year 2000 Silver Eagles available for 7.50 each in lots of 100. They make superb Christmas gifts and tips for waiters. They were sold by the hundreds of thousands on TV for $39.95 each, plus postage. Call me if I can be of service.