Thursday, January 25, 2018

What happens when you allow someone to be between you and your wealth.

They say that a fool and his money are soon parted.  Long time readers will know that my corollary to this is essentially that if you don't physically possess your money then you are effectively parted from it.  It thus stands to reason that anyone who allows himself to become parted from his money, even though he may have a claim check on it that gives him the legal right to repatriate it at any time, is a fool.  Not everyone agrees with me on this, I know.  But these old rules are old rules for a reason - because they are recurring in nature.  It is thus foolhardy to ignore them and no, Virginia, its not different this time even though you might think so.  Churchill is attributed with the statement that, " there is nothing new under the sun except the history you don't know" and history is clear on this matter: if enough strangers have possession of your wealth for a long enough time, your risk of never seeing it all again goes up accordingly.

For each of these reminders I like to provide a recent proof in order to drive home my point. In today's news we find a story about a gold bullion storage company being accused of stealing its customer's bullion.  He is essentially accused of not buying the gold that his customers sent him money for.  They would receive a nice account statement showing they had gold "on account" but in reality he was funding his lifestyle with their wealth.

This is essentially a fractionally reserved gold scam.  He buys a little gold in case some few customers want to take physical possession but then uses the rest of the money for other purposes.  The customers are not allowed to view the gold in the vaults "for security reasons".  If anyone tells you that you can't have access to or even to see what is yours then, my friend, it is NOT YOURS.  It is theirs.  When they default on their promise to give you your property upon demand is when you realize that the paper receipt you held was always a fraud.  Up until that time you had CONFIDENCE in the scam.  Of course, having confidence in something is not any kind of logical statement of truth.  In fact it is the polar opposite.  You have allowed emotional confidence to replace logical truth in your important matters and sooner or later you will get screwed.  It is the nature of man never to give a sucker an even break.

Is all of this limited to gold?  How do you actually know that the money you gave your broker went into stocks.  How do you know that the brokers are not conspiring between themselves to raise the price of stocks in order to get the herd interested in sending them more money?  How do you know that one day the whole con game of the stock market won't just collapse?

I ask you, is it really all that difficult to store your own gold and silver?  Can you not think of 50 awesome hiding places in your home to store the handful of gold coins that represents your retirement savings?  Do you not trust yourself to protect your own property more than a stranger?  There is simply no reason to store your gold in someone else's hands.  Doing so strongly suggests that you think yourself too weak to protect your own property while absolutely proving that you are a fool.

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