The Seven Biggest Lies Told (And Believed) About Gold

Gold

The Seven Biggest Lies Told (And Believed) About Gold by Guy Christopher, Money Metals Exchange

It’s hard to say which lie about gold is the biggest whopper.

Many widely held beliefs about gold are lies – propaganda hammered home to have us believe the only true measure of wealth is government-issued debt.

Big Lie #1: Is a barbarous relic.

Repeated for decades, this misquote of 20th century socialist economist John Maynard Keynes perpetuates a lie exploited as an almost biblical prophesy of gold’s demise.

What Keynes actually wrote in 1923 was “the gold standard is already a barbarous relic.” Big-spender Keynes was advocating legislation to demolish gold’s restrictive power over government spending.

While the classic gold standard (gold backing paper money) no longer officially exists, governments buy and sell the metal around the clock.

Their economic prestige is still measured by the tonnage of gold they claim to possess.

What’s true is every individual holding gold has adopted his own personal gold standard. They disagree that gold – and the gold standard – are “barbarous relics.”

Big Lie #2:  Pays no interest.

This silliest lie of all is meant to portray gold as lower class. But no wealth instrument pays interest until transferred to a counterparty. Gold handed to a counterparty does pay, but it’s not called “interest.” Central bankers know that calculation as the Gold Lease Rate (GLR), where gold serves as collateral to lower interest costs when borrowing dollars in “swaps.”

Gold Swaps and leases are often code for selling.

What’s true is your dollars don’t pay interest at all, until you give away your controlling possession to a counterparty – like putting your cash in a bank or loaning it to a relative. And the interest you’re paid for taking such risk is heading to zero or negative.

Big Lie #3: Will be confiscated, just as in 1933.

This is the lie most useful to government because it has frightened so many away from the metal. The “confiscation” was actually a paid-for expropriation, which outlawed “hoarding,” not owning, the metal. Franklin Roosevelt left millions in gold legally in Americans’ hands. His order was largely ignored anyway.

FDR’s aim was forcing Americans to recognize only fiat paper as money, because he couldn’t print gold for his government spending spree. President Gerald Ford reversed FDR’s order in 1974.

What’s true is Washington has instead published plans to confiscate your cash in your bank accounts without notice.

Big Lie #4: Is not money.

History is littered with the carcasses of collapsed paper currencies, right up to today. In every instance, the metals  stepped in to restore confidence as accepted and desired money.

Across Asia, gold and silver are commonplace currencies. Utah and Texas have recently taken steps to legalize the metals  as acceptable money. Other states, terrified of the Federal Reserve’s money printing and Washington’s reckless spending, are studying their examples.

What’s true is gold and silver have been money for thousands of years, despite Ben Bernanke’s dishonest “gold is not money” testimony to Congress in 2011.

Big Lie #5: Is useless in a crisis because merchants cannot make change.

History shows in every paper money collapse, barter systems always emerge. The metals make perfect barter, accepted by most, including merchants selling goods and services. And gold and silver are widely available in convenient fractional sizes.

In a dollar collapse, yesterday’s price tags won’t matter, since prices won’t mean much in dollar terms. Customers holding gold and silver will determine their metal’s value and decide what change to expect, not merchants.

What’s true, “he who has the gold makes the rules.”

Big Lie #6: Has no practical uses beyond adornment.

This lie is easy to dispel, but it often surprises readers to learn practical uses have been found for gold going back 3,000 years.

Electronics, computers, cell phones, GPS, medicine, dentistry, and space exploration join a long list of modern uses. Gold can be stretched into wire miles long or pounded into sheets thin enough to cover roofs, ceilings, and buildings. Gold is an excellent electrical conductor, doesn’t tarnish or corrode, reflects radioactive and ultraviolet rays, and treats human cancers.

Add gold’s unmatched meaning to religious faiths, significant ceremonies, and personal relationships, and forget billionaire Warren Buffet’s phony rant that “gold is dug from one hole just to be buried in another.”

What’s true is gold won its place as the symbol of wealth, value, faith, and endurance long, long ago.

Big Lie #7: It cannot be created in the lab.

The Seven Biggest Lies Told (And Believed) About GoldOlden day alchemists sought to please their kings by trying to turn lead, and everything else, into gold. Failed experiments often cost them their necks.

The metal has been created in nuclear laboratories, using atomic particle accelerators, but at a cost of about $10,000 per microscopic atom. The tiny gold turned out to be radioactive.

Far more profitable, the “laboratories” of international banks regularly turn paper into gold by selling claims on physical gold through futures, options, and exchange traded funds.

Flooding the marketplace with synthetic paper gold is the preferred method to depress prices of gold and other metals, like silver.

What’s true is this underworld lab experiment ends once banks can no longer deliver the metal they’ve sold. Expert analysis reports the current ratio of factory-made paper claims to real gold is 180:1, meaning each ounce of bullion banks’ gold has been sold to 180 different buyers.

The Seven Biggest Lies about Gold tell the sordid story of a dishonest, bankrupt government, aided by a cozy, compliant news media, and perpetuated by a deficient educational system.

Judging from the constant onslaught of anti-gold propaganda, and the relatively small percentage of Americans owning or knowing anything about gold, these lies have done their damage.

Money Metals columnist Guy Christopher is a veteran writer living on the Gulf Coast. A retired investigative journalist, published author, and former stockbroker, Christopher has taught college as an adjunct professor and is a veteran of the 101st Airborne in Vietnam.

For exclusive info on hedge funds and the latest news from value investing world at only a few dollars a month check out ValueWalk Premium right here.

Multiple people interested? Check out our new corporate plan right here (We are currently offering a major discount)



About the Author

Money Metals Exchange
Stefan Gleason is President of Money Metals Exchange, the national precious metals company named 2015 "Dealer of the Year" in the United States by an independent global ratings group. A graduate of the University of Florida, Gleason is a seasoned business leader, investor, political strategist, and grassroots activist. Gleason has frequently appeared on national television networks such as CNN, FoxNews, and CNBC, and his writings have appeared in hundreds of publications such as the Wall Street Journal, Detroit News, Washington Times, and National Review.

16 Comments on "The Seven Biggest Lies Told (And Believed) About Gold"

  1. Gold is great, you buy it for $1900 per ounce, and years later you have only $1100 worth of gold. Not only you lost your purchasing power holding this useless rock, you also lose on storage fees, commissions, and price way over the spot.

  2. and a gun for protecting the rice and water

  3. You just made the case of scarcity based value. No matter what the monetary system is, people want what others can’t have. Someone will always be willing to give you monetary value for an ounce of gold, be it paper or digital credits.

  4. What fractional weight did you offer and what were you trying to buy? I will gladly accept your gold.

  5. 2stroke_detroit | Oct 23, 2015, 1:08 pm at 1:08 pm |

    I don’t know about this. When it really hits the fan, a wheelbarrow full of gold won’t buy you a loaf of bread or a bottle of water not contaminated by radiation. Rice, lead, and water are the only things that will matter.

  6. Emperor Franz Joseph made such beautiful gold coins. Today he is gone, his army is gone, his empire is gone. His banknotes, bonds, and letters of credit have value only as collectables on E-Bay. Yet one of his 100 Korona coins will more then fill the back of your car with groceries just like it did in 1916, and that is no lie.

  7. If gold is money why don’t my local merchants accept it? I asked three of them. So much for that theory.

  8. Guy Christopher | Oct 23, 2015, 8:01 am at 8:01 am |

    Thanks, jrainspe. Actually, there is quite enough gold to cover every piece of fiat paper money out there, and every digital dollar/yen/Euro out there. It’s a matter of price, not availability, of gold. As I’ve written previously at MoneyMetals.com, I wouldn’t use a gold coin to buy a loaf of bread. I’d use it to buy the bakery.

  9. Guy Christopher | Oct 23, 2015, 8:53 am at 8:53 am |

    Glad you’re there, YellowMetal. Thanks.

  10. Guy Christopher | Oct 23, 2015, 8:52 am at 8:52 am |

    Thank you, George, for the kind note. We’re watching the Chinese, and it’s apparent China wants not only to replace the dollar, but she also wants the biggest place at the table in the gold market. It’s going to get interesting……

  11. Jrain I agree with you too a point. If money was backed by tangible assets and not just created out of thin air governments and bankers would not be leveraging future generations to pay for the current debt. Simply by allowing paper gold leveraged against real gold at 180 to 1 should be illegal.
    Fiat currency allows banks and governments of the world to devalue it screwing people with a shadow tax.
    The great thing about owning physical gold not mentioned is I can hand some to my children without taxes.

  12. Big Lie #6: Has no practical uses beyond adornment.

    The “practical” uses of gold beyond jewelry are so minuscule as to make it an oxymoron to suggest otherwise.

    ALL money is just a proxy for commodity value. If you monetized the value in US dollars of the entire world’s economies, then gold would be worth over $14000 an oz. If you took ALL the above ground gold (which is estimated to be over 85% of what exists in the earth), you would fill a football field just a little over 6 feet deep.

    Under the above scenario, $1 in gold would be a small cube approximately 0.012″ per side. That’s 12 thousandths of an inch, a cube so small you could barely see it on a shiny floor if you dropped it. Now, when $5 bought a suit off the rack in the US, and gold was $35/oz, you could make change with gold actually used as money, but when gold is $14,000 an oz and a suit costs $250, it is really difficult to make change.

    Now, look forward to the future as the world economy grows and 4 billion chinese and indians have a way of life comparable to ours. The world economies would have to more than double their output which would cause the monetary value of the economies to skyrocket, but the amount of gold available is severely limited. So, when economies grow, the value of gold must grow with it, or you won’t have enough “money” to represent all the transactions you will have going on. This means a smaller and smaller amount of gold has to represent the basic unit of value in the economy, be it dollars, ounces of gold, or whatever.

    Pretty soon we’re paying for things in molecules of gold. This is the essence of hyper deflation. Basic commodities do not increase in intrinsic value. A loaf of bread will provide so many calories and sustain life for only so long a time, whether it costs you an oz of gold, or 2 molecules of gold.

    So, the answer has to be to use a “proxy” for gold, e.g. have a coin or specie that is backed by gold.

    This still leaves the “money” supply at a fixed level, and the value of that money must deflate in order to accommodate economic growth.

  13. This should drive the ‘paperbugs’ right to the edge. The last lie I did not see is that there is an unlimited supply, rather than the …it’s deeper, thinner / less per ton on material, and the laying in a California streambed…days are history

  14. Try eating or drinking it. It’s nothing more than a metallic rock. Water is far more valuable than gold.

  15. Dear Mr. Christopher. Thank you for an excellent article. The SGE (Shanghai Gold Exchange) announced that they are planning on establishing a new physical gold price mechanism by the end of 2015 or early 2016 that will compete with London and the U.S. Comex. It will most likely be denominated in Yuan, and unlike the U.S. Comex, will deal in direct physical gold sales rather than in paper futures and derivative contracts which can be manipulated. The truth is that gold markets in the West have been drained for some time, and are now simply paper derivatives markets that are protected by London’s ability to price gold much lower than supply and demand dictates. Remarkably, since the Comex has not actually delivered any precious metals for more than two years despite them being a futures delivery market, the potential that China’s move to take over physical gold pricing within the next six months could very easily cause a derivatives meltdown, and drive the price of gold even higher than the SGE might set it at. Could be very interesting indeed.

  16. TheYellowMetal.com | Oct 22, 2015, 6:10 pm at 6:10 pm |

    Excellent article.

Leave a comment

Your email address will not be published.