Saturday, August 20, 2016

Gold doesn't pay a dividend!

Fools and gamblers who do not understand what money is or what its intended function is always tell gold holders that you can't eat gold and gold doesn't pay a dividend.  Well the first part is true: you can't eat gold.  But unless you like an ultra high fiber diet you can't eat paper assets either, even if you have ordered the certificates or if you hold paper money.  But even in a Mad Max kind of scenario gold and silver coins will always be more valuable than paper assets whose markets have collapsed.  People must remember that the value of any asset in a trade is directly related to whether or not there is a market for it.  On a trip I made to Scotland a couple decades ago I want to a summer fair where stud bulls were being "milked" for their seed.  A shot of this was going for 10k back then because there were plenty of market participant in a busy market for the stuff.  But if you brought a tube of the stuff home and tried to sell it to your neighbor then the the value assigned to it would be zero or even negative ("get that stuff away from me").  That's what it means to have a market for something. 

200 years ago there was no stock market for common people.  The whole concept of a stock market is a new thing.  It will, at the end of the day, turn out to be a complete mania.  I cannot say when but I know a mania when I see one and the whole concept of trying to get something for nothing is mania-think.  The stock market is not a savings tool, it is a gambling casino.   Look at the fate of ALL casinos throughout history!  They boom like crazy and then they inevitable bust.  No, it won't be different this time.  At some point the market for the paper assets traded there will simply dry up and Wall St bankers will cease to be the richest people on the planet anymore.  The main reason I am 100% sure this will happen is that they do not provide any economic value add and that is something that the herd requires anything to provide if it wants to remain part of our culture for the long term.

As to the second point, that gold does not pay a dividend, well that is also true.  Money does not pay a dividend because it is savings.  True savings do not pay any dividend!  The only savings asset that pays a dividend is the one that someone is using for gambling with.  If the bank is paying you 5 percent on your savings then you have to wonder what wild gambling has been taking place in order to afford that.

Of course, 5% interest rates have not been available to the common man for many years now.  In fact, Many countries are now sporting negative yield bonds and The Bank of Ireland is now charging some of its larger customers to store their money in banks.  All of a sudden, zero interest rate is sounding pretty good!

If I've said it once I've said it 100 times: live and work in the Ponzi economy but don't believe in it.  Don't buy into the lies.  Don't trust the system with your retirement savings.  Store away some food and ammo and then save your retirement in gold and silver coins and then stop wondering when the Ponzi will collapse.  Live your life in the way you want to without worry that some asshat banker turned politician will wipe away your life's work with the stroke of a pen.  That can never happen to me!  IF they want to come take what I have then yes they can do it but not with a pen.  Not with a mealy mouthed decree.  No, they will have to send in armed people and some of them will have to risk that they will not go home that night.  Without this credible threat, why should they show any restraint at all??  History proves that, when sure there will be no resistance, the elite always do whatever they want to the common man.  This is not "domestic terrorist" talk or "gun nut" talk but rather just common sense.  It is the exact same thing that the founders of this country were saying:

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