I like gold. It is nice looking; it doesn’t rust; and people stand in awe if you have a lot of it hanging on your person.
What frosts my cupcake is having to listen to all the gold-blather on radio and television for the past 10 years. You’ve heard it too: the economy is crashing, the dollar is worthless, and you better buy gold or you’ll starve and die. This scare cacophony of the gold salesmen began back when their expensive metal sold for $300 an ounce; after a decade and more of panic advertising they’ve forced the price up to over $1,800. You would think they would be satisfied to sit back and rake in the dough, but their apocalyptic shrieking has only intensified.
Let’s see if I understand the logic: my dollars are now almost worthless. Their gold is rising swiftly and predicted to hit $2,000 an ounce in the near future. Yet they want me to trade my pitiful, ragged currency for their miracle metal, the only guarantee of economic salvation. Am I missing something here? It seems more sensible if they harassed me to sell them my gold wedding ring.
The catch here is that our dollar is no longer tied to the gold standard. It was President Richard who announced the U.S. would no longer redeem its dollars in gold. Instead the buck would be backed by the full faith and credit of the nation. Gold can soar to $10,000 an ounce and it won’t affect my personal economics.
What I do worry about is government debt and the printing of money which leads to inflation. As the dollar declines in value, foreign exporters will demand more dollars for their goods — a real pain for big importers like Wal-Mart and its customers.
That brings up another point. During the recent tornado in Alabama, everything was in a chaotic flux including law and order. Thieves and robbers did not go on a gold hunt, stripping victims of their rings and chains. Instead they opted for copper such as that contained in Alabama Power Company’s transformers which had been cast down from broken power poles. Are crooks better attuned to the commodities market? Maybe I should be sneaking about raiding high lines and burglarizing empty houses of their wiring.
Silver producers have tried to copy the scare-advertising blitzkrieg of the gold lobby, to little avail. Nobody seems to care. For decades silver had steady customers in government coins and photographic film. These days Uncle Sam mints copper-clad crap for coins, and digital photography has made film as rare as congressional common sense. Silver’s other market, fancy tableware, has been usurped by less-troublesome stainless steel.
Another metal, lead, has been rising in price, not through bugaboo advertising but through simple increased demand. China’s swiftly rising hunger for automobiles carries with it a need for more car batteries which calls for more lead – and that yields higher prices. Oddly, one of the occupations pinched by this Chinese demand is amateur ammunition reloading in America. Recreational shooters are finding it vexing to fire ever more expensive lead bullets into the dirt where they disappear forever.
The two great icons of capitalism are Supply and Demand. In the case of the Chinese car batteries, prices have risen from an honest public demand for more automobiles. When it comes to gold, demand has been artificially stimulated by many years of yelping scare ads from gold producers. True, they have received much help from idiocies of the federal government and Wall Street investment bankers. These two plagues have combined to mire us in a long-term, jobless recession replete with high commodity prices and inflation.
The government continues to print-borrow money and spend it, which creates an ever-cheaper dollar. If we can get rid of the current crop of Washington imbeciles and replace them with politicians of just average intelligence who can firm up our dollar, the great gold bubble will pop.
And I can enjoy watching all these bullion dupes trying to sell their $1800 gold for $300.