Tell Me, Which Asset Class Would YOU Rather Own?

Phoenix Capital Research's picture

I see an article written by some Guru claiming that Gold has no real investment
value. They usually use points such as the fact that Gold has no cash flow or
you can’t use Gold to buy goods or whatever.


All of this
stuff is outright moronic. Sure Gold doesn’t have cash flow… but then again
Gold also:


§  Doesn’t
engage in accounting fraud.

§  Doesn’t
miss quarterly earnings.

§  Isn’t
affected by Obama’s health care.

§  Doesn’t
lie about its real balance sheet problems.

§  Doesn’t
lose market share due to stupid management practices.

§  Doesn’t
perform stupid mergers or acquisitions.

§  Doesn’t
waste money on buybacks.

§  Doesn’t
lose profit margins to rising commodity costs.

§  Doesn’t
go out of business.

§  Doesn’t
have custodial risk (if you keep your bullion yourself).

§  Doesn’t
pay itself ridiculous salaries and bonuses rather than increasing shareholder

§  Doesn’t
require a bailout or stimulus to stay in business.

§  Doesn’t
commit insider trading or use Government policies to keep itself a billionaire.

§  Isn’t
impacted by a slow down in the economy or consumer spending.


On top of
this, when you buy Gold you:


§  Don’t
get front-run by High Frequency Trading Programs.

§  Don’t
get front-run by its in-house trading team.

§  Aren’t
buying something that can be printed/ devalued.

§  Aren’t
supporting the Big Banks.


As for the
“you can’t buy assets with Gold” argument, this is a stupid double standard.
You can’t buy food or anything else with stocks or bonds either. True, right
now you can’t buy food or services with Gold. But will it always remain that
way? Who knows? Are you NOT supposed to invest in something because you can’t
take it to the supermarket?


Gold offers MANY advantages that neither stocks nor bonds can hold a candle to,
especially in today’s environment of rampant fraud and corruption.

This is not
to say I completely against owning stocks. Some companies are truly incredible
investment opportunities. But blanket statements regarding entire asset class
based on one or two random rules is simply idiotic. Especially when you’re
talking about an asset that has risen over 400% in the last ten years.


How much
have stocks or bonds rallied during that time?



Graham Summers

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Temporalist's picture

For those discussing the dollar there seems to be a clear head and shoulder pattern on the 3 yr DXY...right before the latests dead cat and then the impending collapse.  The FRN fought hard, by way of the Eurocrisis, to not test the 2009-2010 lows but is back on its way to the 3, 4, 5 year lows.


And as for Fed policy a look at the Fed funds rate back 30 years ago shows that the pumping isn't working...notice a pattern?  See the floor?

bingocat's picture

Land fits all those criteria as well, except for the aspect that gold is theoretically portable whereas land confiscation is not as avoidable.

One could say the same thing about oil, good wine, art, and almost all other non-immediately perishable hard assets (even buildings cost labor and other hard assets so they have a replacement/substitution value (unless there are too many of them)). The same thing cannot be said about gold, diamonds, etc.

The one thing which I have never heard from a supporter of gold is how to deal with the fact that there is a "limited" amount of gold and a less limited supply of people/production/labor/food/etc. At a certain point, it becomes useless to denominate anything in gold because there is not enough of it. And because there is always more productivity/labor, the value of those things ALWAYS goes down in terms of gold if gold actually is a store of value, and therefore, the rich (those who own gold) always get richer faster than the non-rich (all the people producing ever more labor/productivity). Somehow I think this is not what "gold-is-a-permanent-store-of-value" blowhards have in mind, but the math is inescapable...

mogul rider's picture

Oh and my family has done that in the past. Then sold the town bit by bit to the people as they gained wealth. They sold for dollars, marks, or whatever and ten converted them back into gold.


Why do people find this hard? I don't get it.


mogul rider's picture

Huh, we just buy the town with gold where the productivce people live and they pay us    rent.


good enuff?

PeteyTrade's picture

Gold isn't an investment, it is a DIVESTMENT out of fiat currency back into real money.

Fix It Again Timmy's picture

The wisdom of owning gold is directly proportional to the amount of manipulation taking place in the financial marketplaces - prime examples - the Weimar Republic, trashing the Glass-Stegall Act...

Reese Bobby's picture

I own gold but I worry about owning too much, too soon.  I own enough to transact during one MadMax year.

But I worry that if/when interest rates start taking off there will be a point where gold sells off hard as the negative cost of carry gets more painful in the short term.

I wonder if the transition period from higher rates to "oh crap" parabolic rates might be the right time to load up on PM's.  But then again, maybe that puts too low a probability on the Big Bad Bang scenario.

What to do, what to do...

mogul rider's picture

buy some land with some gold if you are concerned. As stated previously we just buy more gold at any price.


Teach your family to think in 100-300 years views. It helps

Huna's picture

There's a Leach on your backside Jimmey...

sellstop's picture

Dear Bigger dickus,

All of the world has been depreciating their currencies for many years now. That is why gold has appreciated against ALL currencies.

Half the world is now starting to strengthen their currencies. But, the U.S. persists in a weak dollar policy. ie, low interest rates.

Currencies are valued against one another. The Euro is a major weighting in the USD index, but there are other currencies in that index. I see the USD near all time lows now. I don't see much support, from a technical perspective below near support. From long experience I know that breaking long term support often leads to dramatic declines. Maybe it won't happen. But I try to keep the probabilities in my favor. That is why I own gold as a hedge and as a trade.



Fix It Again Timmy's picture

On February 3, Treasury Secretary Geithner said that giving priority to principal and interest payments on
the national debt would not protect military salaries, pay for government workers or take care of other
contractual US payments. To quote Mr Geithner: “If payment on these obligations were abruptly
stopped, the world would recognise it as a first-ever failure by the US to meet its commitments”. No
more blatant admission of the bankruptcy of the US government has ever been made public. What else
can Mr Geithner be saying with this statement other than this? The US government can service and repay
their debt - or they can continue to run the country - BUT THEY CAN’T DO BOTH! from "The Privateer" - http:///

So, how much faith do you have in our "frog skins"? - a term used by Native Americans to describe the dollar

Bigger Dickus's picture

To all idiots who think the the dollar is about to dive:

look at the freaking chart. If you don't realise that a dollar rally is in the works you're a moron.

The secular bear market in the euro is on and will self-destruct before the usd is done in by Benny.


Reese Bobby's picture

You could be right.  Capital is fleeing to the U.S. at the moment.

Me? I'm interested in Norway/Sweden because nobody talks about them much.

However, people who disagree with you are not idiots or morons.  They are the 45-55% who will be wrong-right relative to you, and therefore determine whether you need to find a new hobby or not.

Good luck... 

Fix It Again Timmy's picture

Buy low, sell high - really, how much simpler can it get?  Has gold reached it's top?  Well, do we live in times were honesty, truth and transparency are in abundance?  Just what is the inherent value of a piece of paper with ink on it?  

Roger Knights's picture

"As for the “you can’t buy assets with Gold” argument, this is a stupid double standard."

It's also outdated, now that financial institutions like JPM will accept bullion as collateral for stock & bond purchases. And there goes the "It pays no interest" argument as well.

Just Observing's picture

I guess you would have to define "assets".


I've bought dental services, granite countertops for my kitchen, and several other items using gold ( appropriately discounted in my favor, of course ).

Never tried to offer shares of Enron in payment, but my guess is I wouldn't get far.

razorthin's picture

we had the dot.con, the lending.con, and now we have the printing.con - you figure out the pattern.  stocks will look good again after the post-hyperinflationary deflationary spiral - prob sometime around 2016 if earth and man still exist.

razorthin's picture

land and food.  but you'd better also have a gun.

fedspeak's picture

The best asset class according to Jimmy Rogers....Commodity soft futures (Wheat, soybeans, corn, etc) ...just look at the charts.




topcallingtroll's picture

Gold and wal mart and robotrader bring out the most passionate arguments. Cant we all just get along?

Dr. Sandi's picture

Cant we all just get along?

No, it's BORING!

topcallingtroll's picture

Ok.....fight...fight....I will referee. -1 for ad hominems. Questioning someones jealous motives for missing either run up is strongly encouraged.

mkkby's picture

"On top of this, when you buy Gold you:


§  Don’t get front-run by High Frequency Trading Programs.

§  Don’t get front-run by its in-house trading team."


No, you just pay a 5-10% spread every time you get in or out.  Real shrewd investment.


You also don't get liquidity, so when everyone in paper assets runs for the door (not IF but WHEN) you have to mail in your gold and take what ever the bid is. Also moronic.

Dr. Sandi's picture

I pay just under 5% when I get in, and get the current spot when I get out. I do it in person with my dealer.

I'm good with those odds.

Also, anybody who sells gold or silver during a run probably isn't selling much because they're obviously too STUPID to have much of a stash anyway.

eddiebe's picture

An old argument. Still critical T makes valid points.

 The point that I didnt see made is that the precious metals are and will be money again by default, because of mistrust by people of all nations in their own central banks/governments and certainly the nation that broke their trust in 1971 by breaking faith with the bretton woods agreement and by screwing all citizens ever since.

That, and the fact that throughout the history of most civilizations,Gold has been and IS money.

sgorem's picture

As Bennacafuck alludes to his Gopher Gietnerass each day, "if we can't dazzle 'em with our brilliance, then by God we'll baffle 'em with our bullshit."

jkjacksonhole's picture

If you buy physical gold as a protection against currancy devaluation and the sht hits the fan, how will others give you change for your gold value.How can you spend an ounce?

In this apocolyptic scenerio, which is why many buy physical gold, bullets may actually be far more valuble.


Dr. Sandi's picture

In this apocolyptic scenerio, which is why many buy physical gold, bullets may actually be far more valuble.

In an "apocolyptic scenerio" nine out of ten of our asses will be mulch. And the one in ten left standing are most likely not the ones who believe they're the chosen ones.

johnQpublic's picture

if you've got an ounce of gold, and you've got a knife...make change

i've got a ten dollar gold coin that someone shaved a hunk off of at some point in the past


as for bullets, who here owns a gun with no bullets?

i have 5k rounds varied hunting ammo

15 year supply even if i was a shitty shot and lousy hunter

SilverRhino's picture

>>How can you spend an ounce?

You literally buy a house or a farm with it.

Boxed Merlot's picture

Buying a house or farm assumes there are title laws in effect that are enforceable, thereby presupposing one is still living in a free republic.  (By the way, beads work fine too if the "seller" is willing, right?)

To me the illustration works if one has a line of continuum with "commodity" on one side and "asset" on the other.  The trading that occurs in the market is between all goods that have extremely short shelf lives to longer shelf life goods.  Commodities are obviously shorter and assets are longer.  Gold's shelf life is among the longest.  Hence, a great "asset".


Precious metal coinage functions best in the transfer of goods in that the greater shelf life the more dependable it's value can be predicted for the future.  When PMs are spoken of as "priced" it's like saying the mountain is moving while looking at it from a speeding train.


With 165K tonnes Au currently accounted for above ground, even at accelerated rates of mining, around 1 percent additional stock is being added per year.  This pales in comparison to Mr. Bernanke's efforts.


If and when the US mints begin to issue precious metal coinage for circulation and our treasury department issues US notes redeemable in said coinage, our citizens will once again return to a freedom our forefathers bequeathed several generations ago.


I won't hold my breath however, because as this thread so convincingly shows, our capacity to believe a lie is second only to our ability to deceive. imo.


RockyRacoon's picture

Deeds convey with "$1 and other good and valuable consideration", so gold would be fine in any property exchange.  It need not be noted as such on any filing.   Ain't that a sweet legacy from the established property laws?   Not that anyone is paying much attention to small things like good and warranted title these days...

Fernley Girl's picture

How can you spend an ounce?

You find someone who wants to buy an ounce.  Twenty-eight percent of RE sales were cash deals in 2010.  When the SHTF there are always people looking for opportunities.  During the depression there were plenty of people who had jobs or successful businesses.  They bought stuff....mostly hard assets.  My great uncle bought farm land.  Lots of it.  Paid cash every single time.  You won't have any trouble finding someone willing to give you a stack of fiat for your ounce of precious.

unwashedmass's picture is truly stunning that you feel perfectly confident in a piece of printed linen to get you what you need ... and you lack any confidence in a slug of gold or silver to do the same....

insanity. absolute insanity.

hardcleareye's picture

I think you misinterpreted his statement.  He is not implying that "linen" will get you what you need any more than gold.  I think for most of the "unwashed masses", it will come down to a "bartering" system for what you need, very inefficient, but functional.

johnQpublic's picture

my grandma taught me that you buy gold and never sell. She learned that living through the depression. The idea is to buy and hold, will it to your offspring ,so that one day if things get really bad, they can sell it to eat. I have gold that was purchased at face value. Actually not purchased, it was money then, and its money now no matter how you slice it. It can always be redeemed for something of greater use.

Keep in mind a recent example: zimbabwe

people went up into the hills to mine a little gold to buy bread.

You folks are too fucking greedy.Money money money, how can i make more money. The idea is to protect what you have already earned to some extent.

I love the information and insight here.Its truly educational.But greed is what got us to this point.All the paper in the world wont help you when what you have helped create comes a crashin down.

work modest.enjoy life.I am an automechanic.My skill will have value even if theres a meltdown. Will yours?I am 45.I never made more than 32k a year.I am semi retired.I help my neighbors.I can fix anything.I am a valued member of my community.

I hope your cash stocks bonds and whatnot give you as much comfort and security as my toolbox gives me.

RockyRacoon's picture

You are right in your overall view.   Gold is like being able to do plumbing or being a good carpenter.   Knowledge and skill are assets that can't be taxed or diminished by government action -- yet anyway.   Gold is just an inert metal, and that is its charm.

Rogerwilco's picture

Some gold? Sure why not, and junk silver too (if the need arises, far more useful for day to day stuff). But no more than 10% PMs.

Investments for the next decade:
Arable land
Rental real estate
Businesses with positive cash flow
Post-crash government bonds

unwashedmass's picture


you know, having watched all this, i don't think i'll ever buy another government bond. post crash or not.

i think they are gonna burn a lot of people on the way down, and ....i don't know as bonding will be a really solid source of funds afterwards for a long, long time.

i was in finance forever, and .... you burn someone, they don't come back, and their relatives and friends leave doesn't take a lot...

something an academic like Ben would never ever understand.

Rogerwilco's picture

I hear what you're saying, but buying government bonds after a reset event would be like giving a credit card to someone just out of Chpt 7 bankruptcy. They are the best credit risks on the planet, for a while anyway.

bronzie's picture

"buying government bonds after a reset event would be like giving a credit card to someone just out of Chpt 7 bankruptcy. They are the best credit risks on the planet, for a while anyway."

and they will be paying 15%+ interest rates on the bonds because that is what it will take to attract capital

unwashedmass's picture


you're probably right, but all trust is now gone. if I bought a bond it would probably be canadian.....

unwashedmass's picture


dollar is at 77.96


the "bounce" into the 78s is not happening.


Zero Govt's picture

missed (one of) the biggest assets of Gold, there's no debt attached.

Gold is not a credit/debt (IOU) instrument, a paper chase, a house of cards. It is what it says on the can, something of integral intrinsic worth you can't fuck with. A rare quality in this institutionally fraudulent world. Those who knock it ARE the old relics, if not something worse.

Gold is good sound stuff, not crap stuff 

Confuchius's picture

@zero govt

There's another thing the sheep forget. Gold (Silver, Platinum etc.) is not a mere investment. It is insurance. Insurance against the kleptocracy who pretend to run the world. Insurance that protects the holder (We're talking about metal, not paper Gold) against insane paper money printing. This is also the reason all the biggest banks, central banks and various Trusts and other full time financial groups own so many thousands and thousands of tons and they never "trade" their holdings. Would you "trade" your insurance policies only to purchase them again at a saving of a few percent? Of course not. Insurance is for protection. Not for "trading". Only fools trade precious metals.

Rogerwilco's picture

"Gold is good sound stuff"

And easily taxed. Right now the vig is about 35% for capital gains on legal sales of PMs, and they haven't even demonized it yet.

yabyum's picture

Buy small/sell small what's da problem.

Zero Govt's picture

they haven't demonized it yet, true, but they also don't know where it is in a cash based society... and then there's silver, platinum, palladium and visits to the Czech Republic or closer to home for unregistered and unrecorded sales. 

If you want to see the Govts success rate with bans and State control check out the drugs industry: Govt's slaughtered day in day out year in year out for decades. We are talking the dumbest institution in the world here!

unwashedmass's picture


you got that. and we're going higher now every fuckin' time Bennie Boy opens his mouth. His party is ending......

and its gonna be bad, very bad.