Understanding Gold (and Silver) Comes from the Heart, Not the Brain / Commodities / Gold & Silver 2019
The title of this essay is part of a statement made by StewartThomson, editor of the investment letter, Graceland Updates. His full commentreads, “It takes more than viewing charts and government debt numbersto understand gold as the world’s ultimate asset. What it really takes comesfrom the heart, not the brain.”
For thousands of years, humankind has understood the magicaldraw (and sense of security) that owning precious metal can bring.
It satisfies the core requirements that make it a medium ofexchange par excellence.
It's durable. It's divisible. It's consistent. It's convenient.It's intrinsically valuable.
There's a sixth reason, which Doug Casey elaborates upon when hetalks about gold's attributes above.
Unlike what David Morgan refers to as "paperpromises" created at the stroke of a pen, run off on a printing press, anddevalued to the point where a central bank can no longer afford to pay for thepaper and ink – neither gold (norsilver) can be created out of thin air.
As Doug so ably concludes:
These are the reasonswhy gold is the best money. It’s not a gold bug religion, nor a barbaricsuperstition. It’s simply common sense. Gold is particularly good for use asmoney, just as aluminum is particularly good for making aircraft, steel is goodfor the structures of buildings, uranium is good for fueling nuclear powerplants, and paper is good for making books. Not money. If you try to makeairplanes out of lead, or money out of paper, you’re in for a crash.
It's why central bankers around the globe are adding gold totheir "monetary" reserves at the quickest pace in 50 years. It's whyGermany has – for the first time since WW II, begun buying gold. And it's whythey are engaged in a multiyear effort to repatriate it from the U.S. and GreatBritain, where it's been stored for security reasons since before WW II.
It's why Poland not only has been making new purchases lately,but recently took delivery of 100 tons of the yellow metal that had been in"safe-keeping" from London, since just before Germany overran theircountry in 1939. Why now? Maybe because, well, your gold seems to be so muchmore secure when you have it "in hand."
It's why small scale (artisanal) miners around the world risktheir lives and health – often damaging the environment – in order to acquireeven the smallest amounts of it.
And it's why you should hold some too. Reflecton the state of geopolitical affairs around the globe. Look at the trend inmotion where banks are – or soon will – charge you for the privilege of savingsome of the paper currency you've earned.
Forcing you to spend seed corn on things you don't need, just tokeep their own financial Ponzi schemes from falling to earth.
They want to drive you into a non-cash environment where yourassets are nothing more than digital entries that can be monitored as to what,when, and where you spend them. That can be "debited" by thegovernment at will. All of which you'll have the privilege of being penalizedfor if you don't spend as much of your savings as edict demands.
What's the definition of a bull market? Inclassical technical analysis (TA), when the price of something – in this casegold (and in our discussion silver too, since the two metals' directionalpricing is so closely correlated) – drop below or break up through an area thatpreviously hosted a well-defined price level, chartists see this as somethingimportant.
Earlier this year, gold rocketed above $1,360, a levelsuppressing prices for over 5 years, giving evidence that it could now couldmove much higher. Sure enough it did, hitting $1,560 just two months later.
A second "tell" was that in breaking above $1,360, itleft a large gap (area where no trading takes place), which as of this writinghas yet to be filled (traded back into).
But one of the most important clues as to the staying power of anew bull or bear run is when a formation like the one shown for gold nearby iscreated.
A series of higher highs and higher lows tells anyone who looksat such a chart, that as long as this pattern continues going forward, the bullshows serious intentions of "movin' on up"!
The fact that gold penetrated $1,400 and then $1,500 so easilyon the upside, gives us confidence that the yellow metal has the potential tochallenge still higher levels during the first quarter of 2020.
Holding goldand silver in your hand will make you smile. If you've alreadystarted a gold and silver acquisition program, take outa coin or bar and hold one of each in your hand (As long asit's not a collectable coin with numismatic value beyond its metal content!).
Rub your thumb and forefinger back and forth on its shinysurface. Feel its weight in your palm. Think about how for much of recordedhistory these two metals have "been there" as insurance, providing astore of value during the most unpredictable and dangerous times in history.
Think about how they're recognized and accepted around the worldin exchange for goods and services – maybe even for one's life! (To this day,elite military units operating anywhere on the globe carry a few 1/4 and1/2 ounce gold coins in their kit – just in case.).
The importance of having some precious metal becomes easy forour minds to grasp, does it not? When you consider having some in your hand, inyour pocket, or stored away in some safe space known only to your and trustedfamily members – there to serve as insurance for loved ones and yourself...
...chances are it will bring a smile to your face, and you willbe able to see and feel that a true understanding of what gold and silverrepresents really does come from the heart.
David Smith isSenior Analyst for TheMorganReport.com and a regular contributor to MoneyMetals.com aswell as the LODE Cryptographic Silver Monetary System Project. He hasinvestigated precious metals’ mines and exploration sites in Argentina, Chile,Peru, Mexico, Bolivia, China, Canada and the U.S. He shares resource sectorobservations withr eaders, the media and North American investment conferenceattendees.
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.
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