Economy

Investing In Gold and Silver Is a Fallacy.

Author

J.B. Maverick has over 17 years of experience as an active trader. He is a former commodity futures broker and stock market analyst.

Author

Role

date

Investing In Gold and Silver Is a Fallacy.
Investing In Gold and Silver Is a Fallacy.

Economy

Topic

These precious metals represent money itself and cannot be invested in their own right. As history has shown, their intrinsic value persists while all else depreciates in comparison.

You can't invest money in itself. You can only earn it, save it, or spend it.

Key Takeaways
  • Investing in gold is a myth. Gold is money and cannot be invested in itself.
  • Everything becomes cheaper in gold and silver terms over time. There are no exceptions. When the money derivatives finally die, everything will be come so radically cheap in gold and silver terms it will shock everyone.
  • People are starting to reject gold derivatives and are turning to physical gold as a form of saving and protecting their wealth.

The notion of "investing" in gold is flawed from its core. Picture yourself in the year 1850, where the dollar was directly tied to gold. If you earned $5 a week as a blacksmith, were you investing in a quarter ounce of gold each week? No, you were simply earning money, which inherently equates to gold. After earning it, your options were to save or spend it, not invest it back into gold.

Fiat Currency vs Gold
Credit - Voima

Speculating in gold faces the same hurdle. Gold represents stable value; thus, holding it isn't speculation. Instead, speculating would involve acquiring derivatives like paper dollars or digital bank deposits. This distinction is crucial—speculation occurs in derivatives, not in money itself.

Over time, items become more affordable when measured in gold terms, as currency continues to function

This phenomenon stems from the inherent stability of money versus the inflationary nature of derivatives. Consider the Dow/gold ratio over the last 50 years—it has consistently fallen, indicating that money outperformed stocks during inflationary periods.

Real estate prices tell a similar story—they appear inflated only when measured in derivative dollar terms. In reality, they have decreased significantly in real money terms since the discontinuation of silver in coins in 1964.

This pattern extends to energy and other commodities—their apparent price increases are illusory, driven by inflationary derivatives rather than real value.

Dollar off the Gold Standard

Critics may accuse of cherry-picking data, but this argument holds no weight when discussing gold as money. Unlike traditional investments, where positions are established and closed on specific dates, money is earned and saved over time. Therefore, there's no concept of cherry-picking in the context of gold accumulation.

The rational approach to accumulating real money involves treating gold and silver as income. Regularly stacking these metals emulates how one would earn money in a sound, noninflationary system. This method contrasts sharply with the speculative mindset of chasing dollar profits through gold ETFs, a futile endeavor given the inevitable collapse of derivative-based wealth.

Fortunately, there's a shift underway—people are rejecting gold derivatives in favor of physical gold and silver. Transparent gold holdings in ETFs have declined since November 2022, signaling a growing understanding of gold's true value as money. This trend marks a crucial step towards dismantling the inflationary Tower of Babel built on derivative wealth.

In conclusion, there is no such thing as investing in gold and silver—they represent money itself, a stable asset amidst the volatility of derivative-based economies. By embracing this truth and stacking precious metals methodically, we can starve the inflationary system and lay the groundwork for a more stable financial future.

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