The lamestream media talks about gold as a ‘barbarous relic’. Warren Buffett once noted that gold doesn’t do anything “but look at you.” It doesn’t pay a dividend or produce cash flow.
“As someone who’s devoted his life to increasing his wealth, Buffett should know better than to say this because the fact of the matter is that gold has dramatically outperformed the stock market for the better part of 40 years.
I say 40 years because there is no point comparing gold to stocks during periods in which Gold was pegged to world currencies, which officially ended with France dropping it in 1967.
Gold is a Much Better Investment than Stocks
Since 1976, the precious metal has outperformed both the Dow and the S&P 500 by a massive margin. See for yourself… the below chart is in normalized terms courtesy of Bill King’s The King Report.
GOLD HAS RISEN MORE THAN TWICE THE AMOUNT OF THE DOW SINCE 1967
The blue line is GOLD and the Pink and Black lines are the Stock Market, in the chart.
According to King, Gold has risen 37.43 fold since 1967. That is more than twice the performance of the Dow over the same time period (18.45 fold).
Indeed, once Gold was no longer pegged to world currencies there was only a single period in which stocks outperformed the precious metal.
That period was from 1997-2000 during the height of the Tech Bubble (the single biggest stock market bubble in over 100 years).
In simple terms, as a long-term investment, Gold has been better than stocks.” statesPheonix Capital.
“Talking negatively about Gold is just one of the means the elites have of “trashing cash” or physical money that can be kept outside of the banks. You see, any form of capital that can be kept outside of the financial system is a major problem for the banks. The financial system thrives on the use of digital currency in the form of loans that can be used as collateral on derivatives trades.
Consider money market funds. A money market fund takes investors’ cash and plunks it into short-term highly liquid debt and credit securities. These funds are meant to offer investors a return on their cash, while being extremely liquid (meaning investors can pull their money at any time).
This works great in theory… but when $500 billion in money was being pulled (roughly 24% of the entire market) in the span of four weeks, the truth of the financial system was quickly laid bare: that digital money is not in fact safe.
To use a metaphor, when the money market fund and commercial paper markets collapsed, the oil that kept the financial system working dried up. Almost immediately, the gears of the system began to grind to a halt.
When all of this happened, the global Central Banks realized that their worst nightmare could in fact become a reality: that if a significant percentage of investors/ depositors ever tried to convert their “wealth” into cash (particularly physical cash) the whole system would implode.
As a result of this, virtually every monetary action taken by the Fed since this time has been devoted to forcing investors away from cash and into risk assets. The most obvious move was to cut interest rates to 0.25%, rendering the return on cash to almost nothing.
This is just the start of a much larger strategy of declaring War on Cash. The goal is to stop people from being able to move their money into physical cash and to keep their wealth in the financial system at all costs.”
Peter Schiff weighs in,’”People are starting to move their money into gold. ‘Everybody believes the Fed is going to raise rates and that ‘false belief’ is keeping the ceiling on the price of gold.
The Change in the Trajection of Fed Policy Will Cause People to Move Into Gold
When people realize that that’s not going to happen [raising interest rates] then the gold price takes off.
Several of the large banks are now talking about “Quantitative Tightening’ which is the idea that foreign central banks are going to be unloading their Treasuries. There is about $12 Trillion in foreign reserves and those emerging market economies, including China,” says Schiff.
China’a PBoC (People’s Bank of China) liquidated around $94 billion in reservesduring the month of August
Will There Be a Future Windfall Profits Tax or Confiscation on Gold?
Schiff continues, “When Roosevelt confiscated gold, everyone used gold as money. Today there is no gold standard and the vast majority of Americans don’t own any, so they don’t have to seize it. Will the government try to seize the little gold that a few Americans have? They don’t really have to because they can just print money and seize everyone’s purchasing power.
But windfall profits tax may be more likely as the government has a history of thing. They certainly did when the oil price went up. If you own gold in your own possession, if the government is going to tax you, they’ve got to find you. And if you end up bartering your gold, it will be harder to know that you’ve disposed of it as a profit, as you didn’t actually sell it. Nobody issues a 1099.
So I think if it all ‘hits the fan’ people are going to have more to worry about than if they reported their profits. In many respects, it’s not going to be a ‘windfall’ really because you just avoided a massive loss – you didn’t reap a windfall! Because if everyone else that didn’t own gold went broke, and you were smart enough to protect yourself, the government shouldn’t tax you for being smart.”
You could in fact just barter the gold, and there would be no record of sales or profit.
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