Burt's Gold Page
Burton S. Blumert [send him mail], dealer in bullion and rare coins since 1959, is publisher of LewRockwell.com.
Letter to Louise:
I thought you might like to see my response to a lady with limited assets who was considering buying gold for the first time.
Hello again Louise.
If you want a dismal view of the world, talk to a gold dealer. The sad truth is that he is usually right, although his timing on when events unfurl may be a bit off.
These are difficult times and we are all getting poorer. And things are not going to improve any time soon.
Aren't you delighted to hear this good news?
In the old days, if you inherited $10,000 but didn't feel comfortable with stocks, bonds, real estate, etc., you kept the money in a savings account and although there wasn't much return, you were neutral.
When you needed your $10,000 it was there, buying power pretty much in tact.
Today, if you hold dollars in a money market, or savings account, there's no neutrality! The risk in holding dollars is insidious. The fact that the account book continues to show $10,000, gives false security.
As to buying gold, it never fails that after you place your first order, the price will drop the very next day. (If it doesn't happen on the first order, don't get smug, it will happen soon enough.)
So, pick your poison. Lose the value of your money without fanfare by holding dollars, or buy some gold and learn to live with the ups and downs.
The inexorable flow of history contains the answer; at some point in the future, the dollar will be dust and gold will glisten.
Here's another way to view it; Gold is often thought of as "insurance." If you insure your car, your violin, or your life, you don't want to collect on that policy.
You pay the premiums, but when it's done, all you have is a vague recollection of something called "peace of mind."
Not so with gold! Gold is the ONLY insurance where YOU hold the premium.
If you view it this way, holding gold is a "no lose" situation.
OK, these time-tested rationalizations should help you survive, without pain, every time the price of gold gyrates.
There will always be ugly days in the gold market, when the market seems to be saying, "gold is garbage."
If one of those days puts you in a panic, call me and I promise to hold your hand.
If I'm more worried than you, then you'll hold my hand.
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