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dom1971
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12 astonishing things about gold

- Perth Mint Blog -

OK I'm getting a better picture now. I have heard you use the phrase "hedge against government" before also. I agree that much of what can be read about gold is untrue, or worse still 98% true with some false misdirection or conclusion.

I think it was Greenspan that said "gold is money in extremis" and I think that is a fair statement. That's happening right now with Iran and Turkey. Gold is THE most liquid asset, bar none. Recognised everywhere - from an Indian peasant farmer to the prince(s) of England. Central banks don't hoard diamonds, or real estate or fine art but they DO hoard gold. Gold may not be money but it certainly is a special kind of "asset", more akin to money than any other thing and perhaps the most successful at its job when used as such.

I don't confuse the massive oil-fuelled growth in the world's past 40 years as the result of some "freeing up" of the world economies under a paper money system. That growth would have happened any way, mostly due to industrialisation, science and innovation, skill concentration and other movements in society over that time. Paper money merely facilitated that to happen a little faster, if at all. Many could argue that the quality of life obtained after 40 years at the paper game is basically the same as when we started, despite all the leaps and bounds of technology and industry.

But I do agree that in today's world gold is not money. Not really... but even money is not money - cash only makes up a small portion of the world's "money". Most of it is a digital record in a bank. If we are going to entertain notions like gold contained in the sea then we should also entertain possibilities like the sun giving us a hiccup and causing a massive EMP shock to wipe out huge portions of these digital records of money. The world's financial systems can get a big "reset" at any time, regardless of central banks, politics, markets or war.

I was actually born in 1971 - that year gold officially ceased to become "money" as a common medium of exchange. My mother was born in the 40s after WW2. She was told she would *never have to work a day in her life*. Her grandfather had amassed a rather large fortune in England and invested it into a very long-term fixed interest rate fund of some kind back after WWI. To cut a long story short, gold was denounced as money, paper came in and the meagre interest accrued by the fund was being overtaken by inflation in a big way. By the time my mother got her inheritance it was enough to cover a 15% deposit on a mortgage for a 3 bedroom house. So much for never having to work a day in her life. As it turns out she's had a wonderful life as a teacher and is well respected, but that's beside the point.

For somebody like me, who has known nothing but paper as money and knowing this story how is it that I can see value in gold? Well it is precisely this story that draws me to gold. Think about it. A wise business man with a fortune gained by a lifetime of good skills, sharp wit and savvy business sense. The fact that he placed this money into a fixed-term fund for some 50 year period is testimony that INTEREST RATES WERE STABLE AND LOW under the gold standard that existed at that time and had existed for what must have seemed like forever. The world I live in is all over the place, we get 20% interest one year and 5% the next but almost ALWAYS more than under gold. It's a rollercoaster of ups, downs and free-falls with no stability and little to trust. The only reliable truth being that if you don't play the game you're bound to lose. They've up'd the stakes and cranked the treadmill to a blistering pace.... where a lifetime of wealth can be eroded away to almost nothing in less than a lifetime.

What I cannot believe is the level of complacency about the subject. The good citizens of the United States fought for their freedom in a civil war against the British Empire and won. This happened (correct me if I'm wrong) due to the English wanting to impose on them a 1% tax on TEA. Yet today most of the world is content to accept much greater ongoing loss due to fiat money abuse without so much as lifting finger. It is this complacency that scares me the most at times.

Commented 4137 days ago

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Beginning of the headline :As gold coin makers, we get to work with one of the most amazing materials in the Universe. Here are 12 astonishing features we’ve found cited about precious gold: · Gold is made in supernovas – massive cosmic explosions that hurl out materials which gather together to form planets. · Most of Earth’s gold is buried too deep to be recoverable... Read More

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