informationliberation
The news you're not supposed to know...




An Introduction to Austrian Economics: Understand Economics, Understand Everything
The Century of the Self: The Untold History of Controlling the Masses Through the Manipulation of Unconscious Desires
The Disappearing Male: From Virility to Sterility

The Obama Deception: The Mask Comes Off
Operation Gladio: The Hidden History of U.S. Sponsored False Flag Terrorism in EuropeThe New American Century: The Untold History of The Project for the New American Century
(more)
Article posted Mar 26 2013, 11:22 PM Category: Economy Source: Bill Bonner Print

Invest in Gold or Your Bank Account Could Be 'Cyprused'

by Bill Bonner

Stocks continued mostly going up last week. Gold bounced up and down… but held above $1,600. Most people would much rather have stocks than gold.

Most of the time, they are probably right. Gold pays no dividends. Nor does it invent new things or open up new markets… or do any of the other things that make stocks go up.

And now most people seem to think that there is a recovery under way… and that the authorities have everything under control. So who needs gold?

According to Kim MacQuarrie’s book The Last Days of the Incas, a sailor in the 16th century earned about 8 ounces of gold for a year’s worth of service.

How much does a merchant seaman today earn? A quick Google search reveals a wage of about $2,500 a month… or about $30,000 per year. That seems a little low, probably not including the value of health insurance and so forth.

And maybe it includes all those sailors from Indonesia and the Philippines, who must earn less than the typical American mariner. So let us say $40,000, which is about the average wage in the U.S.

Hmmm… eight times $1,600 does not take us very far. Only to about $12,800. So either MacQuarrie is wrong or sailors make a lot more today than they used to. Or the price of gold is far too low.

Sailors were probably not very well paid in the Age of Discovery. We will guess that the average wage was probably closer to an ounce of gold per month. That would be a wage of $1,600 monthly… still low by U.S. standards, but not by the standards of most of the world! By world standards, a sailor probably earns about as much in gold as he did 500 years ago.

Those are the kinds of problems and questions you run into when you’re trying to figure out whether gold is overpriced or underpriced. All we can tell is that on the evidence of the sailors’ wages, gold is probably not far from where it ought to be.

Pizarro hit the jackpot when he conquered the Incas and stole their gold. During a four-month period, March-July 1553, the conquistadores melted down 40,000 pounds of Inca jewelry, art, tableware, and religious items. Twenty percent was sent back to the king of Spain. The rest was divided among the 168 conquistadores.

It was a bloody business — killing thousands of unarmed Incas at Cajamarca, for example. But it paid well. The horsemen in the group each got 90 pounds of 22.5-carat gold plus 180 pounds of silver. If they had just put the gold in a safe place, to be dug up by a distant descendant in the 21st century, the fortune would be worth about $2 million.

Last week, gold got a little boost when it became apparent that 1) Europe still faces huge and disturbing financial challenges, 2) governments are ready, willing, and able to steal vast amounts of money from bank accounts, and 3) they are also preparing to put on capital controls to prevent you from moving your money to safety.

We maintain a small bank account in France. It is used just to make repairs and otherwise keep up our house there. The woman who handles it sent this message on Friday:

“Don’t put any more money in the account. We don’t want to get Cyprused!”

How likely is it that the French government will freeze the whole banking sector and skim 10% off accounts? Not very. France is not in that kind of a cash flow bind… yet.

But all the countries of the developed world are headed in that direction. They spend more than they receive in tax revenues. And as their debt increases, their interest payments increase too.

Of course, ultralow interest rate policies — enabled by central bank buying of government debt — keep interest payments low, for now. But low interest rates don’t stay low forever. And as Greece, Spain, Portugal and other borrowers have already discovered, Mr. Market can be a real pain in the derriere.

When he insists on higher rates of interest — fearing that he may not be repaid as promised — state budgets get shot to hell. Then, like Cyprus, the feds get desperate for money. They will go after it wherever and however they must.

Which makes saving money dangerous as well as unrewarding. First, the feds suppress interest rates so you get no return on your savings. Then, when they get in a jam, they Cyprus your savings directly.

That’s just one of the reasons we keep our eye on gold. If the 16th-century sailor had taken his annual pay and buried it under a tree in Extremadura, it might still be there. The lucky treasure hunter would find himself as rich as the sailor who buried it five centuries ago.

The nice thing about gold is that not only does it hold its value over centuries, but it is also a valuable that you can keep out of the banking system. Like jewelry or antique cars, you can keep them at home. Bury them under your own tree. Keep them in your own safe.

If the banking system freezes up or breaks down… you still have them. Pass them to your children. Give them as birthday presents. Or just lock them up and forget about them.

Gold is private money. Dollars, pounds, and euros are public money.

Dollars, pounds, and euros are given to us by governments and central banks. Gold is given to us by the gods.





Latest Economy
- Professor Gruber Strikes Again
- Income Inequality Is a Statistical Artifact
- American Ranking Plummets in Global Index of 'Personal Freedoms'
- Your "Children Will Be Fined" If You Fail To Sign Up For Obamacare: People Are Going To Be In for A Shock
- The End of QE Is Not the End of Bad Policy
- "They Just Want The Money!" - The IRS Can Now Seize Accounts On Suspicion Alone
- Hillary: 'Don't Let Anybody Tell You' That 'Businesses Create Jobs'
- Does Ebola Justify the State?









Comments 1 - 3 of 3 Add Comment Page 1 of 1
Peter

Posted: Mar 27 2013, 6:02 AM

Link
81161 The bankster-mafia plunders peoples bank-accounts, their pension-savings
and who knows what else,
so what's to stop them from plundering your gold ?
They've done it before, haven't they ??

Anyway, don't get 'tung-stoned' !
http://www.mining.com/gold-bar-with-tungsten-core-found-in-uk/
Anonymous

Posted: Mar 31 2013, 6:28 AM

Link
58168 banksters goldsters(those who promote gold because they got lots of it. If they haven't got the imagination to put it into something productive the gov't or the people should take it from them
Anonymous

Posted: Mar 31 2013, 1:29 PM

Link
65110 Gold that is not secret is at high risk of being stolen or confiscated (what's the difference?)


Add Comment
Name
Comment

* No HTML


Verification *
Please Enter the Verification Code Seen Below
 


PLEASE NOTE
Please see our About Page, our Disclaimer, and our Comments Policy.


FAIR USE NOTICE
This site contains copyrighted material the use of which in some cases has not been specifically authorized by the copyright owner. Such material is made available for the purposes of news reporting, education, research, comment, and criticism, which constitutes a 'fair use' of such copyrighted material in accordance with Title 17 U.S.C. Section 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner. It is our policy to respond to notices of alleged infringement that comply with the DMCA and other applicable intellectual property laws. It is our policy to remove material from public view that we believe in good faith to be copyrighted material that has been illegally copied and distributed by any of our members or users.

About Us - Disclaimer - Privacy Policy



Advanced Search
Username:

Password:

Remember Me
Forgot Password?
Register

Psychotic Vegas Cop Filmed Beating Man For Filming In Viral Video Queitly Hired By Another Dept. - 12/17Cop Was Not Fired Despite 75 Counts of Stalking and Harassment -- Now He Just Shot a Mother and Her Daughter - 12/17Cops Called For Wellness Check Beat Innocent Man, Pile On False Charges; Jury Exonerates, Twice - 12/17Ontario Cop Sucker-Punched Good Samaritan Grandmother & Broke Her Leg With Karate Kick - 12/17Florida Cop Gets Schooled in Law After Harassing Man for Playing Rap Song, "F**k tha Police" - 12/16Police Using Social Media Posts to Determine "Threat Score" of Suspects - 12/16US Supreme Court Allows Traffic Stop Searches When No Law Violated - 12/16High Profile Witness In Alleged Excessive Force Case Records His Own Stop And Arrest - 12/16

Rialto, CA Police Made to Wear Cameras, Use of Force Drops by Over Two-ThirdsCop Who Karate Chopped NY Judge In Throat Gets Off Scot-FreeFlorida Cop Smashes Compliant Woman's Face Into Car -- "Maybe Now You Can Understand Simple Instructions"VIDEO: Lapel Cam Reveals A Day In The Life Of A U.S. Police Officer (Tasing, Beating, Breaking & Entering, Stomping On Heads... and Laughing About It)Caught On Tape: Officer Sucker Punches Inmate In Face, Files Report Claiming 'Self Defense'Insult Person On Twitter, Go To JailSWAT Team Brings TV Crew To Film Raid Against Threatening Internet Critic -- Raids Innocent Grandma InsteadCop Karate Chops NY Judge In The Throat
(more)

 
Top