The questionableness of buying gold in the 21st century

For several years I’ve followed and read various libertarians online and tracked their economic discussions, particularly arguments to abolish the IRS and Federal Reserve and to buy gold and silver. I’ve listened to plenty from Ron Paul and countless others on these subjects, and I gotta say one thing: gold is no longer as valuable as people seem to think it is.

I realize this is a very unpopular opinion, having tested it out in chats and been met with a chilly reception, and I’m saddened to come to this realization and continue to hope that I’m wrong. But I’m looking at this country and this world, thinking about the major economic changes that have taken place and that continue morphing bit by bit into something new and extremely centralized (if banks remain in the driver’s seat as they are now). My opinions are not based on any one else’s, because most of what I’ve read and watched contradicts my own conclusion. But I look back on what the gold standard was once upon a time, stumbling through the 20th century toward its final demise during the Nixon administration. People say the money needs to be backed by something so as to act as a store of value. In other words to give money symbolic value that it otherwise doesn’t have — value is not necessarily inherent to money itself. And I understand what people are saying here. But what is money truly representing the value of? Tangible assets? To an extent, yes, but it oftentimes requires human labor to extract and manufacture the components needed to create the assets we prize. At the base of everything we enjoy and rely on are humans who labor to allow our lifestyles to be so. The true value is in our labor, our skills, our productive contributions of varying sorts — and it always has been.

When people today look toward gold, it appears as if it’s an emotional and nostalgic response, a yearning for a way of returning to decades past, and I sympathize with this desire. Yet, I’m forced to consider the practical uses of gold aside from trading with others who desire it. Gold is not a very useful substance, truth be told. We cannot eat gold. We cannot drink gold. We cannot plant gold or use it to construct something of greater practical value (except jewelry, mere ornamentation). How useful is gold in its own right, all unto itself, setting trade considerations aside momentarily?

Silver lends itself to more practical uses, so that precious metal I’m a little less critical of, though I do wonder why greater emphasis isn’t being placed on other, much-in-demand precious metals, like platinum. Or what about steel and plants where it can be recycled and reused? Sounds like a far more stable and predictable bet if one’s in the market to buy stocks. And while I can understand folks holding onto the gold they currently own, or perhaps purchasing additional coins, I am left befuddled by those who simply buy gold stocks. To me, that appears like fools setting themselves up to soon be parted from their money.

One consideration that impacts my view on this is how the Rothschilds are distancing themselves from direct involvement in trading and fixing the price of gold as of 2004. That just doesn’t sit right with me, especially not when after that the drumbeat began to encourage common citizens to hurry and buy gold. Looking back on that family’s secretive past and lengthy involvement in the gold market, I get the impression that there’s probably some shenanigans on the horizon, like speculation betting to profit off the popping of the gold “bubble” that’s been whipped into existence in recent years. Short investing (i.e., short-selling) is what I’m referring to here. To get an idea of how that can be done, I conducted a quick search and came up with this book chapter (intended for reference purposes only and not to expressly promote or endorse the book or its author — having not read beyond a few paragraphs myself).

Here’s another article I’m now reading that was printed on titled “The Fed’s Assault on Gold: ‘Short-Selling’ and the Rigging of the Gold Market” (April 2013).

I’m by no means an “expert” or a know-it-all, just sharing what I’m thinking about. It’s just an intuition that I can’t shake, telling me that this bubble is going to burst and take down a lot of well-meaning folks with it. And it looks like it’s being orchestrated to do just that. Never in my life have I seen so many gold ads plastered everywhere, encouraging everyone to buy gold and silver. That will prove to be no mere coincidence. At least that’s how it looks to me right now.

Gold nugget

Update 4/23/2013: But what do I know? Just talked to a friend today and he thinks it’s a good time to buy gold, thinking the price may be driven down a little further but likely will bounce back up after enough people sell off their shares. This isn’t a subject I follow closely and it had been several months since I’d last looked into it. My friend says the current drumbeat is encouraging people to sell, citing concerns similar to what I voiced up above. And our position typically is to go against whatever is being proclaimed in the media. So, I don’t know what to think of the situation. It would be nice to open a Roth IRA in order to play around and become better acquainted with markets and the trading process, and perhaps the opportunity will open up to me soon.

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