Tuesday, January 5, 2010
We’ve talked about buying gold but I’m sure a lot of people are asking themselves this same question, mostly those that attempt view gold as an investment (something can only make profit for you when buying and selling according to market trends ) instead of stocking it up like a little greedy leprechaun. Tell you want folks, the leprechaun won’t end up living under a bridge like that silly troll. Silly liberal, socialist troll... :-)
Question – Russell, you’ve been bending our ears about buying gold ever since the year 2000. Out with it, at what point or at what level do I sell my gold or silver?
Answer – An excellent and important question. The answer (and this may not surprise you) is that you NEVER sell your gold or silver (or platinum, for that matter). These precious metals are an integral part of your estate and net wealth. I don’t care what the current price of gold is, gold represents unencumbered wealth.
Let me give you an example from the rich man’s standpoint (and remember, this guy didn’t get rich by being stupid). The rich man accumulates and holds ten thousand ounces of gold. At one point (such as today) his gold holdings are worth $12 million dollars. He’s still rich.
Then gold declines to a price of $700 an ounce during a crushing world deflation. Bankruptcies rule, and the price of anything and everything with debt against it has collapsed. At this point the rich man is holding $7 million worth of gold. The fellow is still very rich. Next comes a run-away inflation and gold climbs to $2500 an ounce. Here the fellow owns $25 million dollars worth of gold. Now he’s almost embarrassingly rich, at least in relation to his neighbors.
You see the point. In holding ten thousand ounces of gold, this fellow is always rich, but let’s call it shades of rich depending on the economy. So the rich man isn’t trying to “beat” or “out-trade” the gold market. He holds his gold as an eternal store of wealth through good times and bad.
There’s only one argument against the above thesis. The argument is that gold becomes a “worthless barbaric relic” of a metal. And suddenly, nobody wants gold. How valid is that argument? Five thousand years of history say that argument is wrong. I’ve said before that the value of gold appears to be etched into the DNA of mankind. There’s never been an instance since pre-Biblical times when men didn’t lust after gold.
Conclusion – Learn from the rich man. Never mind today’s price of gold; mind how many ounces of gold you own.
I try hard never using the word never (damn paradigms ), but I’d agree on not selling your gold, not considering an investment.
Your stash of gold is something else. Think of it as a lifejacket, a flotation device. Then you have a bit more and you have a better one, an emergency boat, and so on.
Don’t sell you precious metals, at least not in any serious amount, until you really don’t have a choice.
My father in law sold his to save the family company in 2000. Even that was a bit too much. He should have declared bankrupt instead. He wasn’t thinking about himself and his family, he was thinking about the handful of workers, those families that would have been left unemployed. In the end no one was happy. Instead of being grateful, the most workers got mad because there were no more bonuses and raises, and the small company wasn’t doing well.
No, its better to save your precious metals until you really don’t have any other choice.