It’s an imaginary conversation, but it could easily happen between Colorado Gold and one of the many tens of thousands of financial advisors. Here’s how it could go
Colorado Gold: (CG) “Why don’t you advise your customers to get gold and silver?”
Financial advisor (FA) “I don’t know anything about them, and I can’t make any money on them anyway.”
CG “I understand that, but you could make some money on them if you simply found a supplier, just like you sell stocks through your supplier.”
FA: “I am a licensed financial advisor, and I took a lengthy course on what I do, and that was not part of it. I’m not licensed to sell gold, only stocks, bonds annuities and that kind of thing.”
CG: “Gold and silver are insurance against inflation.”
FA; “I’m not licensed to sell insurance.”
CG “Even real estate has been a hedge against inflation, a lot of time.”
FA “I’m not licensed to sell real estate.”
CG “I’m not licensed to sell real estate or insurance either, but common sense, and your sense of loyalty to your customers I would think, even in conversations, would make you at least mention them.”
FA “I had to take a financial course to be licensed to do what I do, and that is to tell my customers that I will do the best I can to increase their wealth, using stocks and bonds and annuities. I usually get them ten percent a year increase on their money they trust me with.”
CG “With 9.5% inflation last year, plus your charges, do you really think you have increased their wealth?”
FA “We use the best information available from all sources which are expert on my field, and many times it is more than 10%.”
CG “Did your experts advise you on Eastman Kodak K-Mart, Western Auto, Sears Roebuck, J.C. Penney, Pontiac, Blockbuster, or others which are no longer with us?”
FA “No, of course not.”
CG “It should be obvious, at least to me, that all investments can result in a loss, as your advertisement says, by law. Isn’t your firm’s advice, literally predicting the future of the things you sell?”
FA “If you put it that way, I suppose so, but doesn’t your gold and silver go up and down in price also?”
CG “Of course, because no market in anything is static, but long term, throughout history, gold and silver have been real, tangible, beautiful metals, and have been real money in all civilizations and governments, no matter what happens to their money or currency, which generally have become worth zero. Thet’s why we say they are insurance against inflation, or anything any government can do or conceive of, which always seems to cost their subjects dearly.”
FA “You can’t buy anything with gold or silver.”
CG “You can’t buy anything with a share of stock or annuity either, and if you have to sell to get some dollars, it is a long process which is reported to the government. You can barter with gold and silver, or sell them quickly if you need the currency your government deals with, and there will be no reporting or taxes on such a transaction, any more than if you bought and sold at a yard sale.”
FA “Don’t you see that here in America, we deal in dollars and cents, stocks and bonds. These things everyone is familiar with and trusts. These are what we deal with, not silver and gold.”
CG “Until 1964, all U.S. money and coins were made of, or backed by silver and gold. Even the pennies were made of copper. No more. All U.S. money, are merely coins made of inferior metals and worthless pieces of paper, backed by nothing more than, ‘the full faith and credit of the U.S. government.’.”
FA “The annuities we sell give our clients steady incomes for a certain period of time, and this is insurance for them.”
CG “Insurance? I think not. Their payments are certain, but the value of their payments are totally dependent on the value of the money with which they are paid. I remember a gallon of gas at less than at half the price it is now, and the same with every consumer item, but the payments on an annuity will remain the same.”
FA “That is bad, I’ll admit, but that’s what I trained to do, get paid to do, and my customers trust me to get the best returns on their investments possible. We cannot control inflation or the purchasing power of the dollar.”
CG “You are a nice guy, and I am glad to have met you. We all do the best we can with what we know, were taught, and can observe. But just to illustrate my point, in my safe, I have a pretty wood box with four, fourth ounce American Gold Eagles in it, I dated the price I paid on Jan 1st of 2006 as $550.12. Today, even with gold prices way down as are stocks, each coin, if they were available, would be worth more than I paid for all four.”
FA “That’s impressive, but the American dollar is still the reserve currency of the world, and practically everything is priced in dollars, including your silver and gold, so I guess I’ll have to keep on doing what am licensed to do, and hope for the best for myself and all of my clients.”
-Don Stott, don@coloradogold.com