Gold Doesn't Pay a Dividend... But It Doesn't Commit Fraud, Steal Depositor Funds, Lie Under Oath, etc.

Phoenix Capital Research's picture


The mainstream media is rife with investment “experts” who missed the 10- year bull market in Gold and Silver. These guys are now high fiving about Gold’s drop, like they’re geniuses for avoiding precious metals in the past.


Gold doesn’t produce cash flows or pay a dividend, it the manta for these folks. Too bad for them Gold has outperformed stocks on both a 10 year AND a 50 year basis. There are of course exceptions to this in the form of investing geniuses who use compounding to crush the markets… but given that most money managers don’t beat the market and Gold does… one has to ponder these things.


Sure, Gold doesn’t pay a dividend... but it doesn’t charge commissions, tell you to buy a garbage stock, back date options with its executive board, or commit accounting fraud either.


Gold doesn’t go out of business. It doesn’t get insider information and use it against you. Gold doesn’t make money taking the other side of your trades. It doesn’t front-run your stock orders.


Gold also doesn’t create artificial bids in the market. It doesn’t cause flash crashes. Gold doesn’t use your funds to bail itself out and then parade around fundraising for politicians.


Gold doesn’t blow stock bubbles. It doesn’t manipulate data. Gold doesn’t control interest rates to benefit the big banks at the expense of everyone else. Gold doesn’t lie under oath, nor does it channel the public’s money into foreign banks.


Also, you cannot print Gold. Gold doesn’t violate property rights laws or steal your deposits. Indeed, Gold is essentially one of the few forms of investments that gets your capital OUT of Central banker hands.


One wonders how things would go for Cyprus individuals who had their deposits in Gold in their own custody as opposed to sitting in the award winning Cyprus banks.


This concludes this article. 

Best Regards,

Graham Summers










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MeelionDollerBogus's picture

"One wonders how things would go for Cyprus individuals who had their deposits in Gold in their own custody as opposed to sitting in the award winning Cyprus banks"

One need not wonder. For those not daring enough to risk a boating accident, anyone searched by a police / government agent and holding gold is immediately stopped and all gold confiscated on the spot - paper bills too. ALL of it.

gnomon's picture

Why are the premiums (on a percentage basis) many times higher for silver right now as compared to gold?

Would not that tell you that Silver is due for a big bounce back?

MeelionDollerBogus's picture

go to price chart at right, click on premiums (bottom tab) then 1 year (top tab). This shows 35% premiums, a jump up from 20% just days before, and that is a jump from 12% in October. Looks like this (click here for gold premiums) but for silver

actually here:

gold maple leaf 1 year premium

and silver:

quietdude's picture

During prohibition a lot of illegal whiskey walked over our borders. Somehow the clever booze was able to sneak past customs :-)

silvermail's picture

Well, I do not like to break the law.

PUD's picture

Gold is not an investment. it is a speculation

Gold is one of the most environmentally destructive things mined out of the earth. 

Gold mining employs many child laborers and near slaves most of whom use crude techniques involving nasty chemicals that make their way into watersheds


WhiteNight123129's picture

Instead of saying you are wrong.

Here we go some questions.

What is the difference between currency and money?

What is the difference between a financialized currency and a non financialized currency?

Against what should hte currrency be issued in your opinion?

Is a bank deposit payable on demand money or credit?

What is the link between money and credit on aggregate form?

What do credit an money have in common?

Can price increases be due to credit expansion?

Can price increases be casued by money expansion?

Can price decrease be due to credit contraction ?

Can price decrease due to money? (watch out this one is tricky and rare in history)

In the old system it is clear that the coin (Gold or silver) was the money.

What is money today which has similar properties?

What is the difference between an irredeemable and redeemable monetary system?

Can you cite the only jurisdiction which is still on a redeemable monetary system yet not on a Gold standard?

What is the link between redeemability of currency and governement control of money?

Can money occur outside of the decision of government, did it historically?

Which jurisdiction in the world still has somewhat a non-governement control form of currency and money?

Ok, go ahead asnwer the questions.

You will show the depth of your thinking.



MeelionDollerBogus's picture

far less so than the copper, zinc and rare earth elements you need for batteries, magnets for electrical generating turbines and vehicles to operate. Gold by far is less destructive provided you don't use leakly cyanide leachers.

Child laborers around the world are not unique to gold either: they do everything in countries that don't stop it, sometimes in a way that's abusive to them directly, sometimes by bad economies for which the elders are too weak, sick or old to work enough to feed the entire family so the children must do something or starve.

Your point is not invalid but to aim it only at gold is short-sighted.

silvermail's picture

U.S. Dollars is one of the most environmentally destructive things what make on the earth.

Production of dollars employs many child laborers and near slaves most of whom use crude techniques for wood supply.
Production of dollars involving nasty chemicals that make their way into watersheds.

silvermail's picture

Gold is not an investment.


Gold - it's money in their highest form. All the rest - it's just a loan and commitment of various third parties.

cynicalskeptic's picture

Which makes you wonder why SOo many people go to SO much effort to obtain it........  

It's really so much easier to print colorful designs on pieces of special paper - even when done with multi-color prefecting litho (aligned front and back), on specially formulated and watermarked paper with special imbedded fibers or threads followed by an engraved Intaglio print, special magnetic ink imprints and unique seriall numbers (which you CANNOT use as toilet paper because it does not easily degrade and clogs toilets (the new stuff doesn't even burn well).

cynicalskeptic's picture

The one true wild card  element of the gold supply is 'Yamashita's Treasure' - the gold stolen by Japan from Korea, parts of China, and the rest of Asia.  The treasure WAS looted - systematically by the Japanese and enough post war reports exist to confirm rediscovery of part if not all of it.  Given the post WWII Cold War - with Korea split and China communist there was an unwillingness to acknowledge this find - and NO desire to return it to its rightful owners (despite International Law - but then since when has the US studiously followed International Law?)

Possibly enough to DOUBLE the existing 'known' supply of gold in the world, this treasure put Marcos in power and enriched the US - it has been rumored to have been used since WWII as part of the 'Black Eagle Trust' - funding covert ops for the CIA, bribing nations and buying influence.  One might also suspect that it helped fund the explosive growth of the US post WWII.   Keep in mind that China would be very aware of this looted treasuer and the failure of the US to acknowledge its discovery and return - this may be in part why the US has been accommodating to China  since China has established itself as a world power.   Has the US been 'paying off' this debt - albeit covertly via trade imbalances and such?      

IF this vast treasure was still in existence and under US control in the 1970's then there was no reason to abrogate Bretton Woods - you can be sure they'd have found a way to launder the gold needed to get it into the legitimate system.  Or was Nixon all too aware that the US WAS broke.  Keep in mind that Nixon opened the door to China as well - you can bet the topic of China's looted gold would have come up at SOME point then.  Is is possible that some was 'repaid' then as part of a deal to reopen relations?  or were future promises made to come to an accommodation if the gold WAS gone?

So the question remains:  WHAT HAPPENED TO - AND WHERE IS - thte largest stash of gold accumulated in recent US history?

Was it ALL used up in covert ops?  Blows the mind to think so.... Was part of it used covertly to pay for oil over the past 30 years (to prop up the paper $US petrodollar), Was it covertly spent propping up the dollar in other ways.   Is ANY left under US control?  Given the rumors of Gold leaving Fort Knox in the early 80's it seems incredible that the US could have gone through so much gold.  Is all of this disinformation and does much of it all STILL exist?  Seems hard to believe given the desperate measures taken to grab Libya's gold (anyone seen THAT lately?) and the long time set for repatriation of Germany's gold.   Has the US been playing 'bankrupt' when it is not or have we squandered all of our nation's treasure - licit and illicit?

The downside to holding gold is that nobody REALLY knows how much is out there and where it is.   Remember the astonishment at the Indian temple 'find'?

Would be a rip if China HAS been reacquiring its old treasure covertly and ends up having FAR more gold in its possession than anyone realizes.  Would be an 'End Game' move.  And keep in mind that CHina plays for the VERY long term.  They REMEMBER past insults and injuries - they're still po'd (rightfully) about the Opium Wars (Britain's solution to its trade imbalance).  

no answers - lots of questions


cynicalskeptic's picture

The men in the black SUV that came to my front door said for me to say  'Ignore all that above'

silvermail's picture

Why is the government and the media talk and inspire the American citizens that the United States - is the center of the universe?
Because this way, it is easier to control the people.

But gold will be valuable in the world, even if the U.S. will disappear from the face of the earth, together with the Fed and all the Fed notes (so called American dollars).

quietdude's picture

Gold possesion CAN be outlawed at the stroke of a pen and you CAN be forced to sell your gold to a pig for a price he sets. How do I know this can happen? The crippled Commie scumbag Roosevelt already did it! Gold is fine for storing value until after the collapse. During the three years it will take to sort things out, you need stored food, barter goods, tools, and skills. The $1500 you will pay for an ounce of gold will buy 100 bottles of decent whiskey. What is a better barter good, gold or whiskey?

MeelionDollerBogus's picture

easy to bypass - barter gold and silver directly for goods and outlaw the tax man himself / herself plus the already-rising social unrest.

Gold is better than whisky to barter: I can fit more in my pocket and I can run fast with it. Whiskey has barter value no doubt but I would rather be all in gold than all in whiskey if I had to pick just one.

cynicalskeptic's picture

FDR didn't actually go door to door shooting those that refused to turn over holdings......   that HAS happened in other places.   

silvermail's picture

Try to cross the border of any country with one gold coin or 100 bottles of whiskey.

Killer the Buzzard's picture

Because gold is honest money, it is disliked by dishonest men.

jonjon831983's picture

Ya'rrr... but it does make mighty pirates...

and make people do crazy things...

20834A's picture

Simple soul that I am, I'll just admit that having physical possession of PMs makes me feel better.Whether it goes up or down, in or out, it gives me a small sense of security in a world gone mad.

To have a feeling of some control over my life, without a hangover in the morning...priceless.

Seize Mars's picture

One can argue about the performance of the S&P versus gold over time - which time frame, with or without compounding dividends, et cetera. But at the end of the day, Jon Corzine steals your fiat. He walks. He is free. Your fiat is gone. How's that for an investment? Not too cool.

Every Federal Reserve Note you hold as a book entry at some "financial firm" is a risk to your well being.

They rehypothecate and finance drone strikes, the murder and disappearance of schoolchildren and bombing of marathons. No thanks.

Destroy fiat by paying down debts. For god's sake, would you help Don Corleone finance his empire? Of course not.

Why are you helping the US Government wage a war of terrorism against yourself and your neighbors? Get rid of your Federal Reserve Notes.

Son of Loki's picture

It's odd how ZH headlines the other day blasts Paulson when he loses $300 million in one day b/c of the gold drop but ZH says nothing when Buffet loses $1.2 Billion in one day from what I read:


Buffett's IBM Stake Drops $1.2 Billion in Value


It's been a tough week for Warren Buffett's big investment in IBM (IBM).

Big Blue's stock plunged 8.3 percent Friday to $190 per share after the company reported disappointing first quarter revenues.

According to its most recent portfolio filing , Buffett's Berkshire Hathaway (BRK-A) owned 68.1 million IBM shares as of the end of December.

Assuming Berkshire's stake is still around that size, Friday's slide cut the value of those shares by $1.168 billion to $12.94 billion.


I mean...ya on.

Temporalist's picture

There is also the aesthetic value of gold, the jewelry component and the mulitple uses for PMs (candle sticks, silver spikes for the dracul, jewelry, fine machines like watches, art, industry, science).  Is there anyone that has money framed as art or frames stock certs or wears paper or keeps photos of 1s and 0s in their phone?  Origami maybe?  Pass down a painting of your first share of IBM or Google to your children or grandkids? 

I guess people forget how rare gold is and how much is spent just to keep extracting it.  They ain't makin any more.  The disposable culture.  New phone, new clothes, new computer, new car, new house, new husband, new wife, new life.  Next, next, next.

cynicalskeptic's picture

Gold is still used beihg used in high end electronic applications - and much effort is spent recovering the gold from such items when they are scrapped.

Silver on the other hand, is still ending up in land fills and being blown up with smart bombs and cruise missles.  Less silver around in usable form than gold now.

de3de8's picture

Agree, only buy coins for the metal and artistic value combined with varying degrees of rarity.

OutLookingIn's picture


Gold is eternal.

Paper is not.

weyes1's picture

The only time I prefer paper over gold is when I have to wipe my ass.

U4 eee aaa's picture

actually, gold is better for that too. ;)

gtb's picture

I will not be buying your gold...

MeelionDollerBogus's picture

Thankfuly gold is easy to clean. Ancient Romans actually had ass-scraping devices which did indeed use gold. For all you know those gold atoms could be melted into YOUR very own gold bars right now, from deep inside the anus of Julius Caesar himself.

Thankfully not only is gold easy to clean but it also needs to be re-melted to make nice coins & bars so it's sterile again :D

U4 eee aaa's picture

Gold also doesn't disappear with the stroke of a pen either. The legal value of fiat paper....not so much


Throw gold and paper into a fire. Gold wins that battle too

Hulk's picture

The paper markets dieth, mortally wounded by the duel daggers named fraud and corruption...

aleph0's picture



As has always been the case throughout 6000 years of history.

koncaswatch's picture

For those arguing over the intrinsic value of phsyical gold; the article speaks volumes. PMs are truth. Are we noticing the clear disconnect between the paper price and the physical? Of course we are, ZHers are aware. Get it now while you can.

edit: As was quoted in a ZH article (can't remember whose) earlier this week..." it's no longer about return on capital, it's about preservation of capital."

cynicalskeptic's picture

J.P. Morgan -  "Gold is money, everything else is credit"


Who am I to question the judgment of such sleazilly successful financier?

wcvarones's picture

Gold is up 3900% since 1963 ($1400 / $35).

S&P 500 is up in price alone 1838% since 1963 (1550 / $80).


That's 7.7% annualized for gold and 6.1% annualized for stocks.  But dividends have been more than 2% a year and even better with reinvestment.





WhiteNight123129's picture

You are absolutely Correct.

That is why I share my portfolio between Asian Stocks with 5%+ dividend and single digit PEs. and Gold, and so to speak NO US stocks, except stocsk with negative duration.

In teh West.

We have too much debt to GDP.

Debt = financial asset (of someone else)

GDP = circulation of good and services, commodities.

present goods = good sercices, commodities, but GOld is also a present Good.

financial assets = stream of future cash flows.

The ratio can be restaured by either bankruptices 1933 or large inflation 1980.

That is what explains your Gold-Dow ratio.

We have too many finanical assets to GDP.

You chose the adjustment mechanism. Do not buy stocks when PE are high, while the stock of debt is very high.

Buy stocks when PEs are now, dividends Fat, and the totall amount of leverage low.

The leverage will decrease through long long cycle of rising interest raets. (toxic for financial assets).


ebworthen's picture

Does that include fees and taxes?

And, that is broader indices, not an individual's portfolio.

Considering all the parasitic fees and jiggering in markets I'd bet the average portfolio is at 4% or less.

And, like the article says, all those billions of individual's money was used for fraud, theft, gambling, bonuses, bribing, etc.

Return on your money isn't the biggest point, it is finding a way to preserve your assets while attacking the corrupt markets.

azilla's picture

Your point is a good one. However, to those invested in S&P we should have to deduct commisions, and managment fees costs.

For those invested in gold, custody fees.

However, we know that most of the managers and investors do not get the S&P yield. Most of the managers do not beat S&P. Most of the managers get lower yields.

sun tzu's picture

You should start in 1972 after the US went off the gold standard. The price of gold was fixed at $35 from 1963 to 1972. You lose.

wcvarones's picture

I agree, but I was challenging the author's erroneous claim.

wcvarones's picture

Gold outperformed stocks over last 50 years?

Show your work.

jimmyjames's picture

Gold outperformed stocks over last 50 years?

Show your work.


Yep.. and keep in mind- lots of companies that were on the S&P 50 years ago are not on it now-it's nothing but a floating abstraction.. like the dollar-

steve from virginia's picture




Gold ... Doesn't Commit Fraud, Steal Depositor Funds, Lie Under Oath, etc.


Gold ... easy to lose in a boating accident ...

sun tzu's picture

The price of gold was fixed in 1963 and it was illegal for private citizens to own large amounts of gold back then. Start in 1972 or better yet, let's look at the past 10 or 20 years. Don't forget to include all the money that was lost in ponzi schemes