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Something nice from the mainsteam media.

As early moring Fox News does not presently exist in Britian (it has been taken over by Sky News for Royal Wedding reasons – errr if we wanted to watch Royal Wedding stuff could we not just turn on Sky News…..) I have been watching the financial stations.

I can not get Fox Business (“if you provider does not offer it, DEMAND it” – I have tried Neil Cavuto, I have tried. But my provider is Sky and they will only provide competitors to Fox Business not Fox Business itself), so I have been watching Bloomberg and CNBC.

Of the two CNBC is the less bad (Bloomberg basically thinks that the sun shines from the backsides of Comrade Barack and Fed Chairman Ben B.) and one even (just sometimes) gets a nice story (my apologies if the following story was really from Bloomberg the two stations are so similar, and I station hop, so I may be making a mistake)….

A gentlemen (a guest on the show) claimed he could still buy a gallon of gasoline for 13 cents – just as he could have done in 1931. And he had the coin to prove it.

Of course it was a silver coin (a 1931 90% silver coin – a quarter, 25 cents, if my memory serves).

I remember thinking “but that was before the Roosevelt regime….”

Almost as if he had heard my mental question (for the studio team asked him no such question) the gentleman went on….

“And the govenrment went on producing these basically silver coins till 1964-5 when the modern coinage was introduced – made from materials that have little value” .

That is true, I thought to myself, the Roosevelt regime launched its unholy war on gold – not on silver). Future archaeologists (if there are any) may not date the decline of American (and Western) civilization from what we call the “1930s” at all (as most of the coinage appears to be still sound), they may well date it from what we call the mid “1960s” when the coinage suddenly goes like that of the late 3rd century Roman Empire – base metal “washed with silver” (if even that).

“This buying of silver and gold is a very American thing…..” said someone on the studio team (he did not get round to saying “a very Glenn Beck, stroking your rifle, paranoid thing…”).

“No” replied the gentleman guest – “actually European investors buy twice as much physical gold and silver (per person) than Americans do.”

His company, of course, sells physical gold and silver – but it is worth noting that other forms of gold and silver are just PROMISES. One can not buy goods with promises that gold or silver will be delivered at some future time – not in a time of crises, which is the only time one would be trying to buy food or other goods with gold or silver anyway. So what is the point of “nonphysical” gold or silver?

At this point the various studio people (both employees of CNBC and other guests) started to agree that physical gold and silver was a “good hedge” (we do not buy it out of paranoia – we buy it as a rational hedge, an insurance policy….. BUT YOU DO BUY IT).

And the CNBC lady who was helping the gentleman with his coins suddenly seemed to get very attached to a silver coin (it seemed to get stuck to her hand), as she gazed longingly at the other silver and gold coins (American, Canadian – the nationality did not matter, only the physical content). The other people in the studio had similar expressions.

These people (both the journalists and the guests from other lines of business) regularly see bits of paper (or computer screens) with X zillion Dollars (or Pounds or Euros) written upon them. But I have never seen such looks on their faces before – only when they were looking at these physical objects.

12 Comments

  1. dfwmtx says:

    Shiny!

    The nuttier flavors of progressives see all the buying of gold & silver and its subsequent raise in value as another bubble akin to the real-estate and oil bubbles. They think those buying PMs are fools, yet strangely they never offer up any investment advice of their own. (Actually the only investment advice I’ve seen offered by progressives has been “start a home garden, because you soon may not be able to afford or obtain food at the store”, which is the same advice I hear from the survivalists they despise so much).
    More rational folks see the same situation and note the falling value of paper currency against the value of precious metals. Nutty progressives really don’t understand economics because theyt’ve filled their brains with socialism, and socialism/communism ignores economics. Economics is a force of human nature, one they think they can control but which like actual nature finds a way to work around or even undo our controls against it.

    On one hand, I hope precious metals isn’t a bubble, because I don’t want my own investments to loose value. On the other hand, with the price of such investments to be increasing, because it means our economy is heading into a un-fun direction.

  2. David Gillies says:

    A return to commodity-backed currency is a nice fable, but it’s ludicrous. For all its manifest failings, fiat currency is where we’re at, and where we will stay.

  3. dfwmtx says:

    Roosevelt also expropriated the gold of the American citizenry. Read up on Executive Order 6102. If you invested in PM metals, I hope you paid in cash and stashed it outside the bank.

  4. dfwmtx says:

    David, we’re not exactly on fiat currency. We traded the gold standard for the oil standard these days. As the price of oil goes up, so does everything else because of the way oil is tied into the modern economy. Like I said, the economy manages to do things against our attempts to control it.

  5. Jim says:

    @DavidGillies: how can you be so sure? Fiat currencies do not have a good track record, long term. If a fiat currency were to fail, in a Western economy, could the sudden loss of confidence be contained to that one country? Or would the shockwaves ripple inexorably through the world’s currencies? And what would replace a failed fiat currency? Another fiat currency? Once people have lost faith in bits of paper, one piece of paper cannot be just replaced with another with different words on it. It would need something behind it to prop it up, be that gold, silver, oil, whatever, but something the State cannot create out of nothing ad infinitum.

  6. T.K. Tortch says:

    Well it is lovely stuff to behold, the gold and silver. I went through a coin collecting jag when I was young, and managed to get hold on all kinds of silver and a good bit of gold coinage as well. Gold, especially, is just so beautiful to look at; it’s beguiling, somehow, almost a primitive attraction, like looking at fire. And the silver coinage — well it even sounds better — get a silver coin and flip it with your thumb — hit it right and it lets off a nice musical “ting!!”.

  7. Roue le Jour says:

    Many years ago I bought my partner a Canadian Gold Maple Leaf as a Christmas gift. I can fully confirm the ‘Gollum’ effect it had on everyone who touched it.

    I completely lost interest in Neil Cavuto a couple of years ago during an interview. As the show drew to a close, he asked his guests a parting question. “Why do the Brits keep saying we caused the economic collapse?” There was an embarrassed pause as the guests looked at each other. One tentatively ventured “Because we did?” “Nonsense!” said Cavuto, “And that’s all for today folks…”

  8. Peter MacFarlane says:

    I forget when it was that British coinage stopped being real bullion. Was it 1911, or thereabouts?

    I had a few early George V shillings at one time, worn almost smooth (because the silver was so soft), but they made a lovely clear “ring” when you flipped them against a hard surface.

    I wish I’d kept them now, they’d probably have bought me a few gallons of diesel.

    “Gold isn’t going up: paper money is going down”

  9. BM says:

    But in a real crisis nobody really wants gold or silver… you want food and water and probably a gun.

  10. RAB says:

    It’s the heft and the glister, and yes even the sound of real precious metal, that has such a hypnotizing appeal Peter.

    The Treasure of the Sierra Madre, with Bogart and Huston is probably the best film on gold lust ever.

    Having said that, I sure would have bought some when our genius Chancellor, Gurnin Gordon sold half our stocks of Gold for £250 an ounce, and it is now £954 an ounce if I’d known about it.

    My wife inherited a lot of Gold Jewelery that is very old and very heavy, and just mesmorizes when it is in your hands. And I have a jam jar of silver thruppeny bits that must be worth a bit!

  11. NickM says:

    RAB,
    It is because it is metal and most stuff these days is plastic. I recall once having a chat with Midwesterner and he said something I shall not forget. He was talking about guns and the fascination because unlike pretty much everything they aren’t crap. You walk into the Apple Store and it’s all designed to last for five seconds. Not so with a Colt. An iPad is designed, a pistol is engineered. There is the difference.

  12. Paul Marks says:

    I can think of many crises situtation (in many nations) where gold and silver have been accepted as payment.

    To be fair to the Progressives – if they are suggesting that people grow (and store) food, they are not wrong.

    But yes – whether it is gold, silver or food, if you can not defend it…..

    And defend it means firearms – not just one person, but friends you are willing to protect and who are willing to protect you.

    One thing may hit the gold and sliver market in a big way (and not the killing of OBL – that is a short run thing), a big sell off by government (or government pals).

    Remember the Federal Reserve still owns a lot of gold – it it sold a lot at once that would hit the market (and hit it really hard).

    But that is a trick it can not really play twice.

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