Stephanie

Gold Train: All Aboard

Tvb, son, you missed a point, which is that the interest rate you think of is actually negative, in which the rate of return is far less than the rate of inflation (which had been running around 12-15%, if you read between the lines). As I've said elsewhere on seekingalpha, there is NOTHING out there for the wage earner who earns less than $3,000/year (after all bills are paid each month) that would have made the returns silver did back in March if you had sold out and waited for the downdraft that happened recently to buy back in (because I only make $23,000 a year, although I'm trying to change this and find something else in the smoking, gutted ruins of this economy).

But for bearfund's reasons, I hold for the long term, because it is a store of value, nothing more. In fact, fiat has created a way of life which is to "invest the money so that it not only preserves capital, but outpaces inflation as far as possible - get rich while other people work for you when you have not worked to deserve that position of earning capacity." Which is what the stock market is, a ponzi scheme, son. I work for a privately-held retail company, which is 70 years old now. We paid off long-term debt about two years ago, and we have no short-term debt. There should not be any substitutes for working hard.

What we used to have centuries ago was the idea that since you had a relatively stable currency as long as it was based on gold or silver, you could work hard and accumulate savings, and expect that the purchasing power would be around more or less in 10-20 years in case you had to use it.

That is what traditional Indian gold consumers do. They are unbanked for the most part, and when they harvest their crops in mid-August, they will take the paper profits and buy gold with it for savings and for the holiday and wedding season (has already started with Raksha Bandhan a few weekends ago, and Ganesha Chaturthi is coming up next week). They do this because they do not trust corrupt government and thieving central bankers. Compared to us in the US, their experience is far more intimate with corrupt bankers creating massive inflation.