Eulogy to Gold

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I
bought gold bullion back in 1998 as Y2K approached. That financial
assessment was based on the fear of a financial hiatus brought on
by digital money being wiped out or severely hampered. Thankfully,
that threat came and passed but the gold, durable as ever, remained.

When
the coins arrived, and I handled one of those golden discs, I understood
immediately why kings have slaughtered and maimed for gold. I understood
why nations for millennia have based their financial identity upon
it. I understood why Moses declared that the gold of the land of
Havilah was good. The coin I stroked not only reflected back to
me a face, but also durability, stability and simplicity. Prime
qualities in a rare but exchangeable material.

Therefore,
it has outlived all its suitors. Nebuchadnezzar and Nero have gone,
but the gold they assiduously pursued and possessed now resides
in some bullion coin or bar, an item of jewellery, a museum piece
or inside some machinery somewhere awaiting its next metamorphosis.
Men may allow kings to be buried and decay, but they cannot allow
that yellow metal to also lie in the dust while it transfixes their
gaze.

Gold
was $290 an ounce when I invested in it back then. It is currently
priced at $310 and apparently on a long-term ascent at last. Back
in that month of 1998, the Dow Jones was just above 8000 points.
It is still just above 8000 points at the time of writing. Amazingly,
gold has outperformed stocks over those four years and shows no
sign of letting up. Who would have predicted that in 1998?

Now
as I watch the bear market currently mauling paper investments left,
right and centre; the appeal of renewing that golden acquaintance
has been reinvigorated. Greenspan has now whipped the foot pump
behind his back and is feigning innocence by whistling skywards.
The savvy investors have seen his folly and are now running to that
metal which not only does not depend on a credit bubble but thrives
when it bursts like a hyperventilating school kid with bubblegum.

The
alchemists sought the secret, which turned base metals such as lead
into gold. The monetarists of government today think that have turned
lead into gold via electronic printing presses. Like the alchemists
of old, they hoped to flood the markets and get the spending benefit
first. But their lead is still lead and my gold is still gold. Their
paper "lead" mountain grows to the moon but the amount
of gold has been set since the days of Creation.

So,
worried about the Dow Jones crashing? Buy some bullion. Concerned
about paper money becoming just paper? Grab some gold. Frantic about
terrorists striking again? Invest in ingots. The bear market in
gold is just about over; the sleeper has awoken and will again advance
over the inflationary landscape. Hold onto your mettle and metal
and watch capital preservation and appreciation in action!

September 9,
2002

Roland
Watson [send him
mail
] writes from Edinburgh, Scotland. He now runs his own Christian
libertarian blog
.

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Watson Archives

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