“Hey man, why should I buy gold or silver? I can’t spend it, can I?” Oh yes, we have all heard that one, and it is a truly legitimate question, which needs to be answered. Well why don’t you? I will, and he did. While it is true that gold and silver have been real money throughout the thousands of years of recorded history, and are still real money, it is also true that you can’t go down to the corner Safeway and spend it. So, what good is it? Most of the things you buy with dollars can’t be spent! As a matter of fact, when you lay down a few bucks for a jar of jelly, a gallon of milk, a quart of Quaker State, or a new blanket for your bed, you can’t spend them, can you?
When you buy something with your fading dollars, you have already bought whatever you needed or wanted, and the thing you bought can’t be spent, can it? The dollars were used as a method of trade, and what you traded your dollars for, can’t be turned around and spent, can they? Forget gold and silver, and think about the Quaker State, milk, and blanket. You forked over your wilting dollars for a consumer product. If you wanted to spend the dollars, you should have never bought the consumer product. You bought the milk, blanket or oil, BECAUSE YOU WANTED OR NEEDED THEM. Since you can’t “spend” milk, blankets, or motor oil, does that mean they’re no good?
No one spends the product they buy. Spending what you buy, even if you are an antique dealer, is a total non-sequitur. You BUY something with dollars and cents US, and you OWN what you BUY after spending your dollars and cents. To say “I don’t want gold or silver because I can’t spend it,” is actually a foolish statement, because no mater what you buy, you can’t spend what you buy. Let’s then suppose you are an antique dealer, or are in any kind of business. You buy Joe Blow’s used antique table for $100, and sell it to another customer for $150. You haven’t “spent” the table, have you? No, you have re-sold it at a profit, using dollars going in, and out, as well. You will take the $50 profit, plus your initial $100 investment, and buy someone else’s antique, and re-sell it at a profit, if all goes well. You have dealt in antiques, but bought and sold in dollars.
While gold and silver are historic money in all recorded civilizations, those civilizations hadn’t degraded to the degree that ours has. In most of these ancient civilizations, there was no printing press, which limited the amount of governmental crookedness, which was possible. The printing press made honest banking and government treasury departments a thing of the past. There is nothing a government likes more, than to be able to have all the money it wants, and the printing press made that not only possible, but practicable. No where in the world today, is there a government that doesn’t screw its citizens royally, by constantly increasing the money supply via the printing press. The US dollar is worth about 1% of what it would have bought 75 years ago, thanks to the printing press, which produces fiat ’money’ by the billions of dollars each week. They then go down even further in purchasing power, thanks to the presses. The upcoming Fed chief spoke about ’helicopter money’, and the ’power of the press.’
When you buy something with dollars, you are out of dollars, and into what you bought. If you had bought a pound of butter 5 years ago for $1.25, you would have been out of dollars and into butter, which is an entirely different thing. Had you bought a ton of butter, today it would be worth $4 a pound, and you would have made a hefty profit BY GETTING INTO BUTTER AND OUT OF DOLLARS. Unfortunately, butter by the ton, requires a hell of a lot of storage space and a great deal of refrigeration to keep it cold, plus trucking it when you buy and sell it. Not too much profit there. On the other hand, had you bought $2500 worth of gold or silver 5 years ago, which is what that ton of butter would have cost, you would have had no trucking, storage, or refrigeration costs and problems. Nor would you be looking for a place to sell a ton of butter. You, if you wanted to get back into dollars to buy something, would have merely sold your compact silver or gold, and at a much higher price than you bought it.
You would have ’hedged,’ which according to the dictionary means, “To avoid a loss by a counterbalancing trade.” You would have gotten out of dollars, and into a totally different measurement. Pounds of butter? You could have, or tons of coal, barrels of oil, acres of land, square feet of home, or any other tangible which is not denominated in dollars, other than its purchasing price. We’ve already done butter, so let’s examine other hedges. Tons of coal? You’d have to have a very large storage area, plus delivery charges to hedge $2500 in tons of coal. Acres, or homes? Can’t buy much of those for $2500, and besides there are insurance and tax costs to own them, plus real estate commissions or advertising to sell them.
Think of gold and silver as real compact, non-spoiling, no maintenance required, beautiful, no trucking required, butter, coal, land, or home. Name one thing you buy anywhere that can be “spent.” None can, because you have “spent” to buy them. Now that you have “spent” to buy something you wanted, you have the thing you bought. You might have spent your dollars for an antique, food, fuel, clothing, or a TV set. You have the result of “spending,” and it is a tangible good, which you decided to buy or ’spend’ for. Now, as prices continue to climb, because of dollars continuing to go down in value, the item you bought will cost more. The clothing will go up in price, as will the food, fuel, or TV set. Can you sell those things for more than you paid? No, because the market for used TV sets and clothing is very poor, and you have burned the fuel and eaten the food. Besides you needed the food and fuel, and the clothing and TV set also, so you wouldn’t want to sell them anyway!
Suppose you have enough dollars to buy all the food and fuel you needed, and didn’t need a TV set or new suit? Suppose you had just a lot of dollars, and needed nothing? You would probably be in the market for a method of saving those dollars for future use, wouldn’t you? And not only with a bit of interest, but a totally safe place in which to save. Correct? It might also be nice not to have to tell anyone what you have, and be able to pass it along to your kids without taxes if you die, wouldn’t it? If you save in gold and silver, you can re-convert back to dollars virtually instantly if you need dollars to buy something. Your savings in gold and silver have gone up in dollar price, just as fast or faster, as have prices of butter, coal, or Quaker State, only storing and disposing of them is utterly simple. Interest? No interest, only keeping up with and passing inflation, which is more than saving in dollars with interest will do. A lot more.
The GDP is up 3.8% says the government. I write a column on my web site three times a week, but don’t index them, as does Gold Eagle, for which I thank them. Last Monday, I wrote column on that 3.8 %, which opened a lot of eyes, and I did save that one in my documents file. It is a fraud, in other words. I’ll send that column to you if you request it by e-mail. (gold@gwe.net). People, you have got to change your saving habits. You really need to do it. You need to forward this to one and all who have savings accounts or CD’s. Buy your gold and silver anywhere you choose, if you don’t want to buy it from me, but change your habits and avoid all the objections the bankers may put forth, such as “What good are gold and silver? You can’t spend them.” So what? That’s a stupid argument. Protect yourself.