Money matters
Gold and silver: another opportunity
Those still waiting to buy gold and silver will have another opportunity to buy them cheap. And it might be the last.
How have gold and silver done lately?
Yesterday, gold closed at $1530.96 an ounce, and silver at $36.16 an ounce. Each metal tried several times to set new records, but fell back each time. Now both metals will trade lower next week.
The reason: economies worldwide are slowing down. Europeans aren’t feeling so superior to Americans about now, especially since the American tourists aren’t coming. Greece might default, and drag the European Union down with it. Japan is still cleaning up after the Sendai Earthquake. The American economy is also slowing down. Obama’s economic advisers know it. That’s why they quit—every one of them, except for Tim Geithner, the Secretary of the Treasury.
All these things will hurt gold and silver at first. Silver might fall further, because silver has industrial uses. Gold has few uses other than in jewelry or medicine. So gold is less sensitive to economic slumps than is silver.
How about America?
The US dollar index is actually rising. But that’s only because the euro is so weak. Americans have no reason to cheer or feel smug.
The Obama stimulus is an epic fail. Yet Obama and the Democratic Senate still want to spend more.
The Chinese are now saying that the USA is manipulating its currency, and is therefore in default. Maybe the Chinese don’t see the irony: they manipulate their currency. Still, while the United States accumulates debt, the Chinese accumulate gold. And the United States has been in technical default since August 15, 1971, when President Nixon stopped redeeming dollars for gold. Only the petrodollar system saved the country from total default.
And that system could collapse at any time. The war fever among Muslims in the Middle East has not broken. Syria just tried to provoke the next war to save itself. That fizzled out, and now we hear of Syrians rushing into Turkey to get away from their government. (If some of their fathers and grandfathers had accepted Israeli citizenship after the Six-Day War, when Israel offered it, they wouldn’t now have Syrian helicopter gunships shooting them down.) But that might make war even more likely. A desperate Syrian government might fire brace after brace of missiles at Israeli off-shore gas wells. Or the next “flotilla” to head for Gaza might start that war, or try to.
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What next?
Anyone waiting to buy gold and silver cheap have another week, or two or three weeks at the most. Even then, neither gold nor silver will be as cheap as they were when Obama took office.
Gold trades take time to settle. Market timing is not worth the risk when the price might turn around in three weeks or sooner. Best to buy now, and buy enough at a time that the dealer will:
- Waive shipping, and
- Make up the difference in extra coins if the price goes down in the meantime.
I say coins because you want them to ship it to you, so that you can have it in your hand. When the crunch comes, a gold or silver coin in hand really will be worth a thousand in some warehouse. The time to prepare for it is now, not when the missiles start flying out of Syria (or Iran or Gaza City), or the Egyptians close the Straits of Tiran.
Terry A. Hurlbut has been a student of politics, philosophy, and science for more than 35 years. He is a graduate of Yale College and has served as a physician-level laboratory administrator in a 250-bed community hospital. He also is a serious student of the Bible, is conversant in its two primary original languages, and has followed the creation-science movement closely since 1993.
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Hi Terry,
What proportion of your personal assets have you converted into gold and/or silver, and when did you start buying?
Thanks,
Michael
Over half, and I made my buy back in February.
That tell you how serious I am about this?
Hi I am 17 year old girl with zero money, and when I am trying to tell the adults in my life about this dollar default and they should buy gold—-they dismiss me.
At this point my mom isn’t listening and I want to do something to protect myself but IDK how to.
Any ideas?
Check the history of Germany, right after the First World War (the Weimar Republic). They inflated their currency—that is, they kept printing and printing and printing until finally you needed millions of marks (that’s what they call their currency) just to buy groceries. Merchants were raising prices twice a day, or three times. Businesses had to let their employees off for longer lunch hours so they could buy food and beat the afternoon price rise. Someone drew a cartoon once—I’m still trying to find it again—that shows a man wheeling a wheelbarrow piled high with Reichsbanknotes to the corner baker just to buy a loaf of bread.
Ask the adults what makes them think that this couldn’t happen again. Remind them that “it couldn’t happen here” is one of the most famous of “famous last words.”
What do you think “quantitative easing” is? Turns out that the US government itself holds about 9 trillion dollars of its own bonds. Ask the adults in your life: what regular business is even allowed to do something like that? Judges put people in jail for that sort of thing.
Then ask them this: how do they know what a dollar is worth?
Only one thing has stopped a total disaster from happening. Before he had to resign as President, Richard Nixon worked out a deal with the oil minister of Saudi Arabia, that the Saudis would accept payment in dollars, and buy US Treasury bonds and such with its excess profits, in return for the USA protecting them from the old USSR. The Yom Kippur War blew that up, and that’s why we had “the energy crisis” in 1974. Why the Saudis settled, I’m not sure. Maybe they were that afraid of the Russians. And even after Nixon was gone, byu 1975 all the OPEC countries had signed on to this deal.
But now some of them are itching for a chance to get out of it. If another war breaks out with Israel, they’ll take that chance. They’ll demand payment in euros for their oil. Or they might demand payment in gold.
And then what?
The time to buy gold is now, not when the Arabs say, “That’s it! Don’t pay us any more of your worthless paper!” Apart from the politics of the Middle East, can you blame them? Don’t you wonder why they have kept that devil’s deal all these years? How much longer do you think they’re going to keep it? You probably know what I’m talking about. Now you need to tell your friends the same thing.
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