January 30, 2012
Gold Procrastinators: The Endless Agony
by Gary North
www.lewrockwell.com
It happened again on Wednesday, January 25. Gold shot up by $50.
Across the nation, a band of perpetual procrastinators thought to themselves: "I knew! I knew! Why didn't I buy?"
This is the never-ending cry of the perpetual gold procrastinator, year after year. "I knew! I knew!"
It is immediately followed with: "I've learned my lesson this time! The next time gold's price falls, I'll buy."
No, he won't.
Why not? Because, when gold falls, he'll say this: "The decline is just getting started. It will fall even more. I'll wait."
He will wait patiently until gold's fall reverses. He will then say to himself: "This is temporary. It will fall back." Then comes the explosive move upward. Then he will say: "I knew! I knew! The next time gold's price falls, I will buy. I mean it this time. I really mean it."
Year after year after year, this is the pattern.
There is a page you can go to and find exactly what gold sold for, stretching back for over a decade. It's here. http://www.kitco.com/charts/historicalgold.html Here we learn this: on September 5 and 6, gold peaked at $1,895. Then it fell. It bottomed on December 29 at $1,531.
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On March 23, 2000, the Standard & Poor's 500 index peaked at 1527. Today, it is around 1320. But the dollar has depreciated by over 30%. Anyone who took the standard advice to buy and hold a no-load index mutual fund of the S&P 500 has lost 12 years and 40% of his investment. He still believes the story. He will believe the story until an hour before he reaches room temperature.
Why? Because that's the American dream. It confirms the story of American industry, American ingenuity, and American know-how.
It is also the story of Keynesianism, Federal Reserve monetary policy, and federal regulation.
If you call into question the American dream, you call into question Keynesianism, Federal Reserve monetary policy, and federal regulation. That is unAmerican.
Most Americans would rather lose all of their wealth than call into question the American dream, as promised by Keynesians, Federal Reserve economists, and Civil Service-protected federal bureaucrats.
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You and I are all in the back seat. Bernanke is in the driver's seat. We have two choices: buckle up or not.
If you want to buckle up, you buy some gold bullion coins. If you want to live dangerously, you buy and hold a no-load fund of the S&P 500 and a no-load fund of U.S. Treasury bonds.
President Obama is in the passenger seat. He is hoping that Bernanke knows how to drive.
He had better pray that the air bag works.
Full story: http://lewrockwell.com/north/north1092.html
Gold is $1,581/oz today. When it hits $2,000, it will be up 26.5%. Let's see how long that takes. - De 3/11/2013 - ANSWER: 7 Years, 5 Months
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