Buying Gold Creates So Much Good

(Gen 2:12 "The gold of that land is good--")

Silver Stock Report

by Jason Hommel, November 28th, 2009

One of the ways we know that the gold bull market is just barely getting started is when we find so many myths and errors about gold being reported in the media. When even a "positive" article on gold comes out, there is usually some sort of comment buried later in the article that slams gold as being inherently "bad". Multi-generational anti-gold propaganda that people learned in "Fed-funded" Universities, media and culture needs to be opposed and refuted because it is like a cancer on a civilized and free society.

The latest gold myth comes from James Saft, a Reuters columnist, whose opinions are his own.

His article was titled, "Fed audit push gives impetus to gold rally"

The article starts out positive:

"HUNTSVILLE, Alabama, Nov 24 (Reuters) - Auditing the Federal Reserve may or may not be a good idea, but one thing seems pretty sure: just discussing it seriously will tend to drive the price of gold higher."

For the record, I didn't think the Fed audit had a chance, but I support it. If Government thinks it has the right to probe into every nook and cranny of our finances when it makes us pay taxes, why can't the Fed come clean on its finances? Kind of a double standard wouldn't you say?

Later, the invalid anti-gold diatribe comes:

"It has to be said; the very idea of buying gold, which adds nothing to the creation of wealth or innovation and is only conceivably a hedge against bad actions of other people, is dispiriting. If you buy gold you cannot tell yourself that you are doing well by doing good, as perhaps you can with a biotech or fertilizer company. You are simply limiting the damage that can be done to you, and then only in very particular circumstances. What's more many of the people who advocate it as an asset show a disconcerting monomania; the type who if they sit next to you on a commuter train makes you consider pretending the next stop is yours."

Every statement in that paragraph shows a misunderstanding of gold, and it is those misunderstandings that are "dispiriting", and are the cause of James Saft's angst. He says he would not want to sit next to anyone who advocating gold. That's perfectly understandable. After all, it is generally uncomfortable to sit next to someone who continually explains why most of your beliefs are wrong.

He says that buying gold "adds nothing to the creation of wealth or innovation"? How untrue.

In the last thirty days, gold's rise in price has created $868 billion of new wealth among all holders of gold. Details to back up that statement? Gold has moved from a low of $1025.90 to a high of $1194.80, for a gain of $168.90 per troy oz. It's estimated that there are 160,000 tonnes of gold that have been mined in all of human history and remain on the earth, in many different hands. There are 32,151 troy ounces per tonne. That's 5.2 billion oz. of gold in human hands. The increase of $168.90 per ounce, times 5.2 billion ounces, has thus created a measurable wealth creation of $868 billion dollars, in the last thirty days. All the world's gold has increased in that much purchasing power in the last thirty days. If that's not wealth creation, then what is?

It's also quite innovative as far as wealth creation goes, because that much wealth did not originate in the hands of the Federal Reserve who will only waste it, but rather, all of that new wealth was created among all the various savers of gold, so the wealth was widely dispersed, instantaneously, like the speed of light, coursing through everyone's ounces of gold simultaneously. No distribution system yet invented by man has the capacity to distribute so much wealth, so widely, so fast.

Next, James writes, "If you buy gold you cannot tell yourself that you are doing well by doing good." But there are so many good side effects of a rising gold price, of course you are doing good, in the following ways.

1. Buying gold creates wealth among all gold holders, widely distributing wealth all across the world to many people simultaneously.

2. Buying gold reduces monetary fraud, and fraud is bad.

3. Buying gold reduces oppressive government power, and it does so without any violence.

4. Buying gold makes gold mining more profitable, and thus, increases high paying mining jobs that range from administration, refining, minting, production, mine development, to exploration and much more.

5. Buying gold increases gold mining by-products such as silver, copper, zinc, lead, and many other less well known metals that are needed for modern life.

6. Buying gold increases freedom among men, specifically by reducing the debt load of people who owe devaluing paper money, which increases humanity's overall productivity, and especially inspires and enhances freedom for yourself.

7. Buying gold increases wealth among savers and long term planners, which are the best and most productive class of men among humanity.

8. Buying gold prevents others from stealing your wealth, ("limiting the damage done to you", and a "hedge against the bad actions of other people" which James thinks is bad?) and that is a good thing, as it rewards defenders, and thwarts (but does not harm) would-be thieves.

9. Buying gold preserves capital in your own hands, your own town, your own nation, so that you, and the people to whom you will give it when you spend it, will all be better off after a currency collapse.

10. Buying gold can prevent mass starvation that can result from a complete economic meltdown that may come. The preservation of capital can be used to purchase and preserve farms or food production facilities or distribution networks that may go out of business in an economic collapse. Buying gold is more honorable than hoarding food or buying food staples on leverage with futures contracts, which can cause mass starvation by driving up food prices out of the range of the world's poor people, since paper money is worth perhaps hundreds of thousands of times more than the existing food supply.

11. Buying gold saves lives by preventing and limiting wars which can only be funded by paper money.

12. Buying gold saves lives by increasing the standard of living of poor miners in many poor nations who can barely afford the basics.

13. Buying gold can lengthen your own life, as it benefits your own personal finances which can enhance the quality of food that you can buy and eat, and it can enhance your notion of personal responsibility for your own health as well as your own finances.

I'm sure if you think about it for just a little bit, you can recognize a lot more of the good that buying gold can create. Why not pause now, reflect, and email me some of the things that I might have missed. Email:

If buying gold is noble, virtuous and good for so many reasons, then buying silver is perhaps 10 to 60 times as excellent, beneficial and uplifting for mankind. Why? Because of the leverage inherent in silver's smaller market. Silver's smaller market means that the price of silver is more easily moved upwards with every purchase.

So if buying gold is good (and buying silver is better), then lying about gold to prevent men from buying it is bad, as that causes the opposite of every good that I listed.

Lying about gold thus causes death by starvation & wars, encourages fraud, rewards theft, encourages slavery, destroys productivity & wealth or capital, causes unemployment, causes misallocations of wealth, encourages oppressive government, creates misery, rewards laziness, and ruins lives.

So let's forgive James Saft, the reuters columnist, whose opinions were his own. I'm sure he didn't mean to encourage all those bad things and destroy all those good things by bad mouthing an inert, innocent substance that can cause so much good. The learning curve for gold is steep, and none of us have perfect knowledge. Some of these things are difficult to learn, especially when so few teach them these days.

After all, as the Preacher said, "Without God, we are but dust--" And as the 4 year old girl asked, "Mommy, what is butt dust?" Maybe the little girl was thinking of this:
Baby Farts Baby Powder

Speaking of which, I hope I have blown away Jame Saft's anti-gold diatribe.

The contact information for James Saft is listed at the bottom his reuters article.


    Jason Hommel