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I’ve been getting questions about how to
explain gold investing to people who know nothing about the shiny metal. I
found an old Road to Roota Letter that I think may help
people explain gold to a “gold newbie”.
3
GOLD CAMPS By Bix Weir
For the past 9 years I have been an EXTREMLY vocal
advocate of Gold as an investment practically begging everyone I know to buy
some physical gold and stick it under their mattress, in a hole in their
backyard or deep in their sock drawer. I have been the “Chicken
Little” of my town running up and down the street yelling “The
sky is falling, the sky is falling” but for the most part NOBODY was
listening. This morning, just after gold touched $1,000 for the first time in
history, my phone was ringing off the hook with calls from friends, family
members and others who all want to know one thing… “WHY?”
Now this is where I have always stumbled. Where can
I start the gold story without losing their attention? (or
them thinking I was the lunatic they always knew I was!) Should I talk about
supply/demand imbalances, lack of reserves, inflation adjusted prices,
gold’s monetary role, gold leasing, the credit
crisis, paper vs. physical gold, naked shorting, the Gold ETF or…heaven
forbid…the ongoing covert manipulation of gold? (www.gata.org).
Where could I start without making them roll their eyes and walk away after
the first two words came out of my mouth?
Well, I believed I have found a suitable starting
point, and I’d like to share it with you to help explain
“WHY” to your friends and family. With people who have little or
no knowledge of gold, I have decided to start all conversations by narrowing
down the different gold “Camps”. Let’s call them the
“3 Gold Camps” and here they are:
The Western Camp (N.
America/Europe)
The majority of western societies view gold as jewelry
and as a very small investment class followed zealously by slightly quirky,
fringe investors they call “Gold Bugs”. Very little gold flows into western countries nor is much mined for
export. In western societies gold is neither liked nor disliked. It is very
rarely discussed and seen as of little relevance.
The Eastern Camp
(Asia/Middle East)
The majority of eastern societies view gold as a store
of value. Gold is sold mainly in the form of jewelry but that jewelry is
purchased and held as a family’s wealth. Gold jewelry, coins and
trinkets are given at annual times of celebration and used as a dowry at
weddings. Gold is handed down through generations as inheritance and is, for
the most part, only sold when cash is needed. Gold plays a vital role in
eastern societies and is of great relevance.
The Central Bank Camp
(All Central Banks)
To a central bank gold is money. A central
bank’s prime objective to regulate the fiat money system their country
(and the world) has adopted as their means of exchange. This is not an easy
task given that since 1971 all countries are on a non-backed, floating
monetary system. Gold has served as money for thousands of years and
has always competed directly and indirectly with paper money. Proof of
the central bank’s view on gold as money is found in their gold reserve
holdings. Central banks are still the largest holders of physical gold in the
world even though all paper currencies were taken off the gold standard
almost 40 years ago. Central banks stock up on gold when it goes out of favor
(80’s-2000’s) and sell gold when it starts competing with their
fiat money (1970’s & 2001-today). Gold is the most important
competitor to fiat currency and full control of the gold market is the #1
requirement of any fiat money system.
Once a “non-gold bug” understands the
“3 Gold Camps” they will be able to discuss the gold markets on
many different levels, and they can start building a knowledge base about
gold. Now that they fully understand the motivation of the market
participants they will get the “WHY” part of the equation and
want to participate in what could conceivably turn out to be the largest bull
market in financial history.
Gold at $1,000 is a big deal if only for the fact
that it got people’s attention. Now it’s our job to explain the
“WHY”.
DISCLAIMER: The Road to Roota
newsletter focuses on the conspiracy side of the gold and silver market
without the constraints of generally accepted market views. Bix Weir and all those associated with this newsletter
disclaim all and any guarantees, undertakings and warranties, expressed or
implied, and shall not be liable for any loss or damage whatsoever (including
human or computer error, negligent or otherwise, or incidental or
consequential loss or damage) arising out of or in connection with any use or
reliance on the information or advice offered. The user must accept sole
responsibility associated with the use of the material offered, irrespective
of the purpose for which such use or results are applied. The information
offered is no substitute for financial advice.
Bix Weir
Also
by Bix Weir
For a limited time free subscription to the Road to Roota Letters email me at: bixweir@gmail.com
Bix Weir
is a freelance author and analyst dedicated to exposing the long term
manipulation of the gold and silver markets. He has worked closely with the
Gold Anti-Trust Action Committee helping to pull the curtain away from the
Cabal of International Bankers that have taken
control of our free market system.
DISCLAIMER: The
Road to Roota newsletter focuses on the conspiracy
side of the gold and silver market without the constraints of generally
accepted market views. Bix Weir and all those
associated with this newsletter disclaim all and any guarantees, undertakings
and warranties, expressed or implied, and shall not be liable for any loss or
damage whatsoever (including human or computer error, negligent or otherwise,
or incidental or consequential loss or damage) arising out of or in
connection with any use or reliance on the information
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