Below are excerpts from a St. Patrick's Day article
written by Gary North. The full article is accessible only from a
paywall.
The Logic of Gold and
Anti-gold Investing by Gary North
When you buy gold, you are shorting Western civilization.
I have been saying this for 50 years, and I will not stop saying it.
When you buy gold, you are shorting Keynesianism. You are shorting the
Chicago School of economics. You are shorting the stock market. You are
shorting currencies. You are saying to yourself, loud and clear, that you do
not believe that a world controlled by central banks is a stable, reliable
world. . . .
The best thing you have that will defend you against really bad times is a
good job: voluntary exchange. You need continuing income, based on the sale
of your labor services. . . It is your job, meaning your productivity, that
is the source of most of your wealth. The rest of your assets are simply used
as a temporary backstop to bail you out when you lose your primary source of
income.
The average man believes in the promises of politicians. To the extent that
he understands central banks, he trusts them too. He thinks the world is run
by experts, and these experts are going to do whatever it takes in order to
make the world safe for the average Joe. So, there are lots of reasons not to
buy gold. You will be told by everybody that buying gold is foolish. Your
investment advisor will tell you this. Your brother-in-law will tell you
this. CNBC will tell you this.
The entire civilization is built on this presumption: gold is a barbarous
relic. This is because modern civilization is built on the wisdom of central
bankers. The modern world is built on permanent monetary debasement. . . .
Why should you buy gold if you don't own any gold? Because there should be
something in your life that says this: "I don't trust the politicians,
the central bankers, and the Medicare system." At some point in your
life, you have to put it on the line. You have to have at least a symbolic
amount of your net worth tied up into an asset that will protect you briefly
if there is a major crisis.
I have not told people to put half their money into gold and silver. I have
told them to put somewhere between 10% and 20% of their retirement portfolios
in the precious metals -- but not in an IRA or a 401(k) program -- too
visible to the IRS. I have told them to start with gold coins. . . .
People in China, India, and Asia know they cannot safely trust governments.
They know they cannot safely trust the central bankers. They have been lied
to all their lives by government officials, and they have been mired in
poverty. So, when they get ahead in their economic lives, they buy some gold,
because that's what their grandparents and their great grandparents did. Why?
Because they knew from experience that they could not safely trust
politicians and bankers.
But Americans still think they can trust politicians and bankers.They don't
want to make a symbolic move to buy gold.
Anyone who refuses to own gold is saying, loud and clear, that he trusts
Janet Yellen, he trusts Obama, he trusts Jeb Bush, he trusts Hillary Clinton,
and he trusts his local Congressman, who has assured us Social Security and
Medicare payments are guaranteed forever. He also trusts the business cycle.
He doesn't think he's going to get fired. He doesn't think mass inflation is
a possibility.