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Wednesday, January 14, 2009

GOLD IN YOUR SURVIVAL PLANS

In times past most folks knew that gold was the only real money there was. The trouble now is that while some might tow the gold bug line that this is the case, in practice we all trade and hoard greenbacks instead. There is a heavy penalty for keeping gold. We must pay a dealer fee to buy it and another fee to sell it if we need trade currency since no one accepts gold as payment anymore. And it accrues no interest. Even if there is no real return on paper investments this is the argument put forth by central bank apologists.
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In times of deflation the price of gold will go down. But more than likely the purchasing power will increase as sellers are more desperate for sales as no one has any jobs or excess income to spend. In times of inflation golds price will increase but the purchasing power will hold steady or even better reflect an added premium as there is far less gold in existence than will meet demand in times of calamity. That is why the price of gold went from $35 to $800 in the 1970’s. More people wanted a stable real money as things got worse throughout the decade.
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Gold will hold its purchasing power. Forever. The only reason your value of gold will decrease is if the supply suddenly increases. The only way that is going to happen is if we are able to economically mine it from sea water or an asteroid. And the odds of that happening are slim. Unless a freak accident like that happens your gold value will not be effected. Not through Depressions or hyperinflations or wars or changes of government. Gold is the only way for you to preserve your wealth in total safety.
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It is true that gold will not feed you during a famine. It will not protect you from bad men with guns. You need beans and bullets. But to carry your excess capital through your life and perhaps into that of your kids and grandchildren you should only have gold. Land can be taxed beyond your ability to pay. Diamonds are vastly inflated over their value by the monopoly on them. Silver is too heavy for its value, although in and of itself is an excellent value store. It is just not portable wealth. The only thing that can come close is valuable knowledge, and that is not a constant. Knowledge can erode or blossom in value depending on many factors. Gold stays constant because it is so scarce.
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We all have excess wealth. The guy making minimum wage has excess wealth. He uses it to buy pizza and X-Box games and trying to impress the girls with a car. Middle class couples have plenty of excess wealth, they just waste it all on cars and a big house and what not. I am not judging. I don’t race down to the coin shop with my excess wealth either. My point is that gold is affordable to all of us. If we choose it. In a way it is good that nobody thinks they can afford it as then it would cost a lot more than it does now.
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We all know the dollar will eventually become worthless. That is a given. In less than one hundred years it has lost 97% of its value. In the last seven years we have seen most prices double. No ones income has doubled, except perhaps that of lawyers. Or politicians or defense contractors. The average worker is seeing their purchasing power erode very quickly. This might seem like the worse time to buy gold. You can now least afford the disposable income needed to safeguard your wealth. But the actually question you have to ask yourself is, do you want to eventually see all your remaining dollars used as toilet paper or do you want to bite the bullet now and get it while it is at a low, artificially held down value. You don’t even need $700 per once ( roughly- at $625 an ounce and commission and sales tax ). You can buy coins of less than one ounce weight. You will pay a higher commission but will need less up front cash.
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This all assumes you have your grains and beans and ammunition. And other basic supplies. Iodized salt, grain grinder, LED lights, alternate heat. The usual suspects. It actually doesn’t matter if you don’t buy gold at all. Usually. Supplies are much more important. This is of course about preserving wealth. Supplies are about preserving life. Just don’t discount gold hoarding as unneeded. Social Security might fail. You might need savings in your most vulnerable period of old age. A little is better than none. Everybody needs savings for rainy days and gold is the best. Assuming things get a lot worse and people take gold as money again and you don’t have to pay to convert to Greenbacks to spend it.

Original: http://bisonsurvivalblog.blogspot.com/2006/12/gold.html

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