Why You Should Buy Gold Coins - Part Two Part one of “Why You Should Buy Gold Coins” touched on debt, companies like AIG insurance that have been deemed “Too Big To Fail”, and how these companies practice what is called “risk transfer” to pawn their debts and failures off on others when failure comes knocking and there are debts to be paid. I also drew an analogy between companies like AIG (add in GM, Wells Fargo, Citibank, Chase, etc) needing to borrow money and a child asking their parents for money to cover debts. In this part of the article-blog, I want to carry that analogy a little further. Would You Ask Your Parents To Cover Your Debts If They Were Broke And Destitute? If you parents had no money, would you ask them to cover your debts? Would you expect them to go to their friends and acquaintances to ask or beg for money on your behalf because you were remiss and irresponsible in your own business matters? Hopefully not. Yet, this is something like what happens when companies that pay multi million dollar salaries to CEO’s and executives get caught with empty checkbooks and have to crawling to the government for help, because our government is broke. Therefore, the government, through either loans, decrees, and eventually higher taxation, agrees to bail out another “Too Big To Fail”. What Does This Have To Do With Gold Coins? There is an inverse relationship between debt, which is what the government issues in the form of Federal Reserve Notes, and true physical wealth, which is what you own when you hold an old gold coin in your hand. You see, when the government has to create more and more debt, and/or more and more “money”, (also known as liquidity these days), the purchasing power of each dollar, relative to gold and silver, decreases. The Proof Used To Be In The Change Jar Have you heard tell of such unicorn-like creatures as a nickel candy bar or a fifteen cent gallon of gas? Well, those things still exist today if you were to convert the prices into silver dimes. Today, silver is around $20 an ounce, and a dime is roughly one tenth of an ounce of silver, which makes it worth about $2.00. Being that a candy bar today is about a dollar - or half a silver dime, and that a gallon of gas is somewhere around $3.00 - or a silver dime and a half, you can see that pricing relative to metals has not changed. The pricing of items relative to a debt based dollar, on the other hand, is out of control. Call ITM Trading at 1.888.OWN.GOLD. We are here to be of service
Posted on: Fri, 30 May 2014 22:03:36 +0000
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