Thursday, October 22, 2009

Gold is Money..just ask Terry Herbert

Ultimately, Gold is's a way to store wealth over the long term.

Just ask Terry Herbert. The man spent his time with a metal detector, looking for treasure in England's green and golden fields. He'd been looking for years, but when he finally found something important it "brought tears to my eyes," he says.

What Mr. Herbert found was perhaps the greatest discovery of buried treasure in English history - 1,500 different artifacts of gold and silver...dagger hilts, crosses, helmet cheek pieces and other items of war booty from the Anglo-Saxon period, about 1,400 years ago.

Had Mr. Herbert stumbled upon some IOUs from a Saxon chieftain, it would have been a remarkable discovery. Its historical value might have been inestimable. But what he found weighed in at 11 pounds of gold. In addition to the value to museums and historians, it has monetary value. Even if you melted it down, erasing all trace of its history and provenance, it would still be worth about $160,000 at today's price - probably about as much as it was when the Saxons stole it.

Gold's "price has been remarkably similar for centuries at a time," wrote Roy W. Jastram in his 1977 book, The Golden Constant. "Its purchasing power in the middle of the twentieth century was very nearly the same as in the midst of the seventeenth century."

Gold outlives paper money, empires, governments...all of us and all our institutions.

Monday, October 19, 2009

Great article by Chris Martenson

Exponential Money in a Finite World

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I recently attended and presented at the Association for the Study of Peak Oil (ASPO) conference in Denver.

The entire summary of everything I heard boils down to this: We are already past peak oil.

I'll wait for a minute while that sinks in.


While the implications are enormous, seemingly incalculable and therefore ungraspable, I truly believe that understanding the impact this will have on our economy will illuminate the future for those who take the time to internalize the details.

One of my central contributions centers on the idea that it is our monetary system itself that is out of step with reality. Everything else we see around us economically is merely a symptom, while the cause of our current and future ills is the dependence of our monetary system on perpetual exponential growth. A profound and important set of conclusions immediately result from the acceptance of this argument.

While I spend a lot of time sifting through current data and trying to explain it, this is the primary scaffolding upon which I hang everything else and which drives my long-term views.

(see CM website for rest of article)

Wednesday, October 7, 2009

Spot verses Coin Price of Gold and Silver

One of the most common questions I am asked about gold and silver, (especially small .9999 pure coins), is why the huge price difference between the spot price quoted on the Comex and the coin price. The reason is, there is always a premium for small denominations.

It is a bit like buying meat. You can’ get meat for the price of a cow. You have the premiums involved in dicing and slicing and processing to get it to your table. With smaller cuts, the price is even higher per pound or kg. With YOUnique (for example), their gold and silver are mostly small denominations in order to help people to save in small amounts, amounts they can afford. However, it does cost them a little more for the smaller denominations than it would, say, for a 1kg bar. But who's got a spare US$50K floating around for one of those?