What Gold-Bashers Say
(A Summary of about 1000 gold bashers, presented by 112 gold bulls )
Silver Stock Report
by Jason Hommel, December 10th, 2009
What do Your Naysayers Say? (Why won't your friends and family listen?) http://silverstockreport.com/2009/nay-say.html
The letters poured in, 112 of them, which you can see, here:
No, you didn't miss an email. I didn't send any of those reports out, they are too long.
Here the arguments, summarized, put into similar categories, and counted, to see the most popular arguments, both against, and for, owning the precious metals:
This is probably my most important report of the last 5 years, if ever. This is ground breaking research. Few others could even conduct this market research, as I have a large email list of 80,000 readers. This could be a psychology study or PhD thesis. It is an amazing picture of society today. With 112 responses, with each person trying to talk to about 10 people on average, then this is a summary of what over 1000 people are saying against precious metals. Now, knowing human psychology, these reasons to not buy gold might not be all the real reasons, or deeper reasons, which sometimes cannot be properly articulated, but it's close. Especially when so many say the same kind of things.
I was shocked at the results. My memory is selective. I tended to remember some of the most outrageously stupid answers, such as, "gold pays no interest," and "you can't eat gold," more than the most popular answers which, at first, appear more reasonable such as, "gold looks expensive now," and "how would I sell it if nobody takes it?" I would not have guessed the results if I had not counted them up.
After each answer, I have a number that indicates how many times it was listed as a reason. Some of the statements, if similar enough, I combined, so there is a total listed. There are more than 112 total, because in many letters, people gave multiple answers on why multiple people said they were not buying gold, or silver.
The summary is a bit subjective. Different people, if they pour over the original 112 letters, may summarize the reasons slightly differently, or come up with slightly different counts.
I made no distinction between gold or silver, this could also be a list of why people are not buying "precious metals."
I'm not bothering to refute any of these now in this letter. Maybe next time. This study ought to be mandatory reading for any industry professional who is making a gold presentation to investors in the next year; mining companies, refineries, mints, hedge funds, bullion funds, bullion dealers, bullion storage companies, etc. Even professional gold bashers ought to study this list to see what arguments are "working" in their favor.
My overall impression is that if these are the best arguments that over 1000 precious metals bears have to offer, then gold is going up another 10 to 30 times higher from here, over the next decade or so, and silver will do about 3-5 times better than that.
I was going to call this piece "anti gold arguments", but then I realized that much of what they say is not actually an argument. Some are questions. Some are myths. Some are just ad-hominem (personal) attacks. Saying "be quiet" is also not an argument, and neither is silence.
TOO HIGH NOW: Gold and Silver are just too high/expensive now at "all time highs", a "bubble", and perhaps they are bearish on the metals in the short term, waiting for a dip, or staying away, thinking it will crash. (23) Similar: Regret Wish I bought it cheaper, thinks it's too late now. (2) 25 total
HOW TO SELL?: They are concerned about when, where, how to sell it, (confused about exit strategy), what will it buy, especially if cash becomes worthless, then who could afford to buy gold and silver to keep the price up? (14) Similar: Gold and Silver are not liquid enough (2), You can't spend, or buy anything with them by using them as currency. (4) 21 total
CRAZY GOLD BUGS: Gold bugs are nuts, weird. (16) Similar: Those promoting gold and silver are not credible. (6) 19 total
CLUE LESS: They admit they don't understand metals. (9) No time to go buy it (4) or research it. (5) 18 total
SHUT UP: Please stop talking about it. (9) They don't have the attention span to listen. (3) Similar: They don't want to think about the bad stuff. (5) 17 total
PRICE CHANGES: Don't like the volatility or uncertain & risky price changes. (It's a gamble). 17 total
GOVERNMENT WILL FIX: They think stocks/housing/economy will come back. 9 The government will provide. (5) 14 total
SILENCE: Deer in the Headlights / No answer / ignore it. 13
I'M BROKE: No money to buy it (8), I need to save, can't afford the luxury of gold. (3), got to pay down debt first (1) 12 total
BAD BROKERS: Financial advisor talked them out of it. 9
MIGHT BE STOLEN: No place to put it, it might be stolen, too difficult to buy a safe. (5) Worried about paying taxes on the capital gain, or outright confiscation. (4) 9 total
Metals don't pay a dividend or interest. 6
No leverage in physical. (2) A 100% or more gain in non-leveraged physical metal is not enough to be worth it to improve their life. (3) 5 total
You can't eat gold, I'd rather buy food. 4
Media coverage: Too much. (1) Too little (1) Too confusing (2) 4 total
Gold is an archaic or barbarous relic. 4
They are too educated to buy "useless" gold that "does nothing". 4
Being greedy is bad. 3
If silver and gold are so great, why have they not kept pace with inflation since 1980? 3 (Bloomberg was one)
How does gold have any value at all? 2
Silver is too heavy. 2
The Lord will provide. 2
I'm locked into my IRA / 401k. 2
Silver's just an industrial metal, and industrial demand will go down if the economy crashes. 1
If silver's so great, why is silver still so cheap? 1
"You can't take it with you". 1
Gold and silver are only just metals. 1
Jesus is coming. 1
I'll wait until it becomes popular, then I'll buy it. 1
The dollar will never crash 1
The government is not that dumb. 1
It's a problem of the USA only. 1
Gold and silver has been so disrespected and derided by the government and economists 1
Frightened about market manipulation. 1
Already sold gold jewelry. 1
I'm not a gold bug. 1
Gold is a scam. 1
They don't want to buy on a dip, because the metals are "trending down". 1
"Nobody ran around with bags of coins during Katrina, and therefore metal will never been used in times of crisis." 1
Why would they sell it if it's so great? 1
Why do I need it if you have some of it? (Son to Father) 1
There's a silver VAT (value added tax) of 15-17%, plus a steeper markup in the UK than in the US. 1
Money is not important. 1
I know someone who knew someone who lost so much when silver crashed from $50/oz. in 1980. 1
As interest rates rise, gold will fall. 1
How do you know it's real? 1
For, (How they tried to convince their family/friends):
Put gold and silver into their hands / gave them some, even jewelry. 26
I sent them emails from precious metals bulls like you. 8
Thanks for talking me into it, Jason. 6
I took them to a coin shop. 6
Silver coins keep up or outpace inflation; and continue to buy gas at 'cheap' pre 1964 prices, or better. 5
The public in China is not yet buying 1
Cash is going down in value due to inflation. 1
They bought just to shut the gold bug up. 1
Silver is good for your health, it kills bacteria. 1
Talked up silver's industrial value, and scarcity. 1
Talking about banks manipulating metals prices low. 1
It's FREE, it's just a monetary conversion. 1
It's the moral thing to do. 1
Buying silver is "saving", not "investing". 1
Better to have it and not need it, than to need it and not have it. Paper money is only a "promise"; gold is payment in full, nobody's promise to pay. 1
Ask them, "how much money did you lose this week?" 1
Explanations the bulls make to explain other people's odd behavior of not buying metals (These are not the arguments that people SAY when offering reasons why they don't want to buy gold and silver):
Don't worry, God 1 or Satan 1 must be blinding them. 2
People don't like change. 2
People can't just abandon their belief systems. 2
They misunderstand the scriptures. 2
People have Attention Deficit Disorder. 2
Humans are dumb. 2
People can't think. 1
People want to be "with the herd". 1
People are drugged up. 1
People can't control their emotions enough to be able to buy on dips; they want to buy into a rising trend, but not at high prices. 1
People don't believe paper money can fail. 1
People have their hands over their eyes, their ears, and their mouths. It's almost as if they don't want to know the truth. 1
Based on the top five answers, I have developed the following text last night to be used in our ads. Feel free to copy this and use it yourself, with no permission or attribution needed. Feel free to embellish, alter, improve, distort, change, upgrade, or downgrade, the text as you wish.
--Gold is far below the TRUE all time "inflation-adjusted highs" which would be about $7000/oz.
--You can always sell or trade gold or silver at any time to any gold dealer anywhere in the world, they are the most liquid assets in the world, a perfect store of value.
--The Fed admits it is creating money at all time highs, that the US federal annual budget is about $3 trillion, yet all the gold in all the world ever mined in all of human history is valued at a mere $5 trillion.
--You don't need to research gold for over a year before you buy it, you just need to get some now. NOW!
--Gold is not a promise! It's solid, reliable,
& real. Get real gold or silver today from the JH