Gold, Inflation and Costco

The End is Near!

Looking back over the last 40 years of my involvement in the gold market, I notice that for a great portion of my career the market was subdued and going nowhere. Sure, we had some volatility and during the heyday when I first got into the business mortgage rates were at 12% or higher and gold was trading around $600 an ounce having reached as high at $800. Which was a huge move back then from $32 an ounce, as the world was still on a roller coaster ride after the Nixon Shock, when the US dollar became no longer convertible to gold.

High inflation followed as the market tried to determine the real value of the US dollar. The Foreign Exchange market became a major industry as money crossed borders to try to earn the most they could in interest over specific periods while risking exchanges moves. These kinds of machinations still exist to this day.

The public always had a more difficult time trying to participate in these markets. It has always been and will continue under the same structure to be run by big money elites in the world. The public are always paying for this erratic system. In a capitalist system, the losers should pay the price for their errors. But in 2008 we saw the bailout of the wealthy on the backs of the public yet again. The US government and the Federal Reserve made sure that no banks went completely under as that would have wiped out some of the elites. Who has more than $100,000 to $250,000 in deposits? Hint, it wasn’t the middle class.

These are the signs of the beginnings of socialism. As usual, the people who love the socialist system are the wealthy that have certainty they will retain their wealth. This is because socialism is for the ordinary citizens not for the elites that believe they rule over us as we are just like cows to them.

The United States of America was not built this way. The Constitution protects the rights of all individuals. This is why the American Civil war was justly fought against the evil of slavery in what is supposed to be a free country for all of God’s children.

Now the US public is seeing something they never expected only twenty years ago. They are seeing our government riddled with corruption. Law enforcement being weaponized against the people and against political opponents. Freedom of speech and freedom of religion are both the fundamentals which have underpinned the growth of this country. Incidentally, they are both under attack. On top of that many people doubt the efficacy of our voting system. More and more the USA seems to be devolving into what is mockingly called a “Banana Republic”.

The world has become unstable politically and the likelihood of more wars is on the horizon. Inflation which over the past few years exploded for the man in the street is expected to continue its trajectory. Then add to this, the concern that the US dollar is also under threat from forces trying to get out from under the boot of the USA. It is only logical that the search for an asset that can survive all kinds of social and governmental failures would be sought.

This topic can easily be a book but suffice it to say for this commentary that there are real credible reasons why the American public is buying gold. These same drivers are also an influence in the fastest growing asset on earth, Bitcoin. The big change here is that technology is seemingly helping the public be able to get freedom from the elites who wish to control how they think, what they believe and what they can own.

Of course, CNN did a piece on the news with Erin Burnett and to try to scare people away from buying physical gold from Costco they invited Suzie Orman on the show. She laughingly tried to posit that the physical ownership of gold is illiquid claiming that you would need to have the gold “surveyed”. The word she meant to use was assay, but even forgiving her this error, her statement is false. The gold bars offered by Costco can easily be bought and sold online with well recognized firms, at coin shops and jewelers throughout the country without having to get your gold assayed.

Hence, buying and selling gold has become easy for the general public. They no longer need to be frightened to handle it as the pundits on television want you to believe. The market is safe. liquid and transparent thanks to modern technology. If you need any assistance at all, feel free to give me a call.