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The Lies They Tell About Physical Gold & Silver

The Lies They Tell About Physical Gold & Silver

Dear Reader

This week's blog explores the most common lies told - and sadly often believed - about Physical Gold and Silver. If you delve into researching the world of Physical Gold and Silver you will come across some of these on an almost daily basis. Sometimes they are out-right and sometimes they are subtly inserted into an otherwise positive commentary. But either way, it is always great to know the attempt in hiding the truth. It is impossible to tell if the authors of these lies know they are lying or if they are just repeating a lie they also have been told. After a while these false positions become ingrained in the social chatter of Gold and Silver commentary. So let's look at the seven biggest lies told about Gold (and Silver).

"It’s hard to say which lie about Gold is the biggest whopper. Many widely held beliefs about Gold are lies – propaganda hammered home to have us believe the only true measure of wealth is government-issued debt. (Value Walk, 22 October 2015)

*I'd like to credit Guy Christopher from Money Metals Exchange for the original premise of exploring the most common lies told against Physical Gold. Christopher is a retired investigative journalist, published author and former stockbroker.

Lie 1: "Is a barbarous relic."

"Repeated for decades, this misquote of 20th century socialist economist John Maynard Keynes perpetuates a lie exploited as an almost biblical prophesy of gold’s demise. What Keynes actually wrote in 1923 was “the gold standard is already a barbarous relic.” Big-spender Keynes was advocating legislation to demolish gold’s restrictive power over government spending. While the classic gold standard (gold backing paper money) no longer officially exists, governments buy and sell the metal around the clock. Their economic prestige is still measured by the tonnage of gold they claim to possess. What’s true is every individual holding gold has adopted his or her own personal gold standard. They disagree that gold – and the gold standard – are “barbarous relics.”

One can find ample evidence to back up this truth with further fact. On 13th August 2015 The Telegraph published a lengthy piece entitled "Europe in crisis: everyone from Putin to ordinary savers is stockpiling gold." That is exactly the illustration of the statement that every individual holding gold has adopted his or her own personal gold standard above. Join many of our readers and become a client owning your own Physical Gold and Silver. It is extremely straight-forward, call one of our team who will talk you through the steps and ensure you are in control of your purchase. We have helped many, many first time buyers step into owning and holding their very own Physical Gold and Silver bars and coins.

Lie 2: "Pays no interest."

"This silliest lie of all is meant to portray gold as lower class. But no wealth instrument pays interest until transferred to a counterparty. Gold handed to a counterparty does pay, but it’s not called “interest.”

In addition, "what’s true is your currency doesn't pay interest at all, until you give away your controlling possession to a counterparty – like putting your cash in a bank or loaning it to a relative. And the interest you’re paid for taking such risk is heading to zero or negative."

Lie 3: Will be confiscated, just as in 1933.

This is the lie most useful to government because it has frightened so many away from the metal. The “confiscation” was actually a paid-for expropriation, which outlawed “hoarding,” not owning, the metal. Franklin Roosevelt left millions in gold legally in Americans’ hands. His order was largely ignored anyway. Roosevelt's aim was forcing Americans to recognize only fiat paper as money, because he couldn’t print gold for his government spending spree." For the history buffs, "President Gerald Ford reversed Roosevelt's order in 1974.

What is truly interesting is the opposite is actually true in that - in the States at least - "Washington has instead published plans to confiscate your cash in your bank accounts without notice."

Lie 4: Is not money.

As many of Bleyer's previous blogs explore, "history is littered with the carcasses of collapsed paper currencies. In every instance, the metals stepped in to restore confidence as accepted and desired money. Across Asia, Gold and Silver are commonplace currencies."

Two States in America have even gone so far as to pass bills to legalise Gold and Silver as acceptable metal (Utah and Texas) recently, with more states to follow.

"What’s true is gold and silver have been money for thousands of years, despite Ben Bernanke’s dishonest “gold is not money” testimony to Congress in 2011.

Lie 5: Is useless in a crisis because merchants cannot make change.

"History shows in every paper money collapse, barter systems always emerge. The metals make perfect barter, accepted by most, including merchants selling goods and services. And gold and silver are widely available in convenient fractional sizes."

Take a look at Bleyer's vast choice in offering you small Gold bars and coins from 1g to 1/10 oz in beautiful coins.  We even sell combi bars and plan to increase our range of these in the future.

"In a economic collapse, yesterday’s price tags won’t matter, since prices won’t mean much in dollar or pounds terms. Customers holding gold and silver will determine their metal’s value and decide what change to expect, not merchants.

What’s true, “he who has the gold makes the rules.”

Lie 6: Has no practical uses beyond adornment.

This lie is easy to dispel, but it often surprises readers to learn practical uses have been found for gold going back 3,000 years.

Electronics, computers, cell phones, GPS, medicine, dentistry, and space exploration join a long list of modern uses. Gold can be stretched into wire miles long or pounded into sheets thin enough to cover roofs, ceilings, and buildings. Gold is an excellent electrical conductor, doesn’t tarnish or corrode, reflects radioactive and ultraviolet rays, and treats human cancers.

Add gold’s unmatched meaning to religious faiths, significant ceremonies, and personal relationships.

What’s true is gold won its place as the symbol of wealth, value, faith, and endurance long, long ago.

Lie 7: It cannot be created in the lab.

Olden day alchemists sought to please their kings by trying to turn lead, and everything else, into gold. Failed experiments often cost them their lives. The metal has been created in nuclear laboratories, using atomic particle accelerators, but at a cost of about $10,000 per microscopic atom. The tiny gold turned out to be radioactive." Here is a humourous allegory as to whether you can "create" real Gold and Silver (credit to Money Metals Exchange) - "the “laboratories” of international banks regularly turn paper into gold by selling claims on physical gold through futures, options, and exchange traded funds. Flooding the marketplace with synthetic paper gold is the preferred method to depress prices of gold and other metals, like silver."

Yesterday I came across this alarming headline on Mining.Com which perfectly illustrates this point: "Gold price: Hedge funds ready to dump 430 tonnes: On Tuesday on the Comex market in New York, gold futures with December delivery dates fell for a fifth session in a row giving up more than $20 an ounce to trade at a one month low. Settling at $1,114.10, gold is down nearly $70 an ounce or 6% from where it trading just before the Federal Reserve's interest rate announcement last week which opened the door for a rate rise when the bank next meets in December. Higher interest rates boost the value of the dollar and makes gold less attractive as an investment because the metal is not yield-producing and Friday's employment figures in the US will give the clearest indication whether the Fed lift rates from near zero where they have been since December 2008."

First of all, did you spot Lie 2, dropped in there like a slightly off-hand dismissal of the metal? "because the metal is not yield-producing." But, for example, if I bought an ounce of Gold in 2009 and sold it in 2012 I would have, on average, made a "profit" of 71% on my original purchase. The "price" of Gold has been punished by flooding the market with paper certificates since 2012 as Central Banks and nations scramble to repatriate their actual physical metal lent to other banks. But even if I bought my Gold in 2009 and sold it in 2014 I would have made on average a profit of 30.2%. (The Statistics Portal, Annual average gold price from 1900 to 2014)

Value Walk go on to conclude a very haunting point, "What’s true is this underworld lab experiment ends once banks can no longer deliver the metal they’ve sold. Expert analysis reports the current ratio of factory-made paper claims to real gold is 180:1, meaning each ounce of bullion banks’ gold has been sold to 180 different buyers. The Seven Biggest Lies about Gold tell the sordid story of a dishonest, bankrupt government, aided by a cozy, compliant news media, and perpetuated by a deficient educational system.

Judging from the constant onslaught of anti-gold propaganda, and the relatively small percentage of members of the public owning or knowing anything about gold, these lies have done their damage."

So, if these are the lies, what is the truth?

Let's go back to the above scare-mongering headline above briefly. If Hedge Funds really do dump millions of tonnes of Gold onto the market what kind of Gold will it be? It will be the "created" kind! The paper gold certificates - see Lie 7. But as we discover, REAL PHYSICAL Gold and Silver cannot be created.

I feel this is important to highlight, because if interest rates go up, the "paper" price of Gold and Silver may, just may, dip for a while. But let's look at the REAL GOLD AND SILVER FIGURES, not the paper price. Now I must admit I am quoting from the US Mint on sales figures, not the UK for the simple reason that figures for the UK are so much harder to come by. But here's the question, Why are Gold (and Silver) going to be dumped by Hedge Funds if sales figures for Silver Eagles, for example, were as high in the 3rd Quarter of 2015 as in the first quarter? In fact, the greatest sales figures were achieved in the months of July and August (United States Mint, Sales and Mintage Figures)

To my mind, the only logical reason one would sell the paper version of a physical product that is still very much in demand is to lower the price of the physical product, in order to buy more of it!

So, as you read of possible interest rate hikes and maybe even see the paper price of Gold and Silver fall for the interim, see also if you can spot any of the seven biggest lies woven into the story. Then determine to find the truth and act on it.

For more information on owning Physical Gold and Silver contact one of our friendly, helpful team who will guide you through the easy payment, collection and choice of bars and coins for you. Why not buy some small Gold bars or some Silver Coins for Christmas? Call now on 01769 618618.

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