I love these commercials going around on the radio and TV trying to convince people to part with their hard-earned cash to buy bullion gold, gold coins from back in the Gold Standard days, or just shares in companies that mine the commodity. The fast-talking narrator is all about the falling value of the dollar via inflation and how you need the "security" that comes with owning physical gold because a "day of reckoning" is coming because the Federal Reserve (or "government") is printing money ("Ben Franklins" according to one commercial I just heard) and has a license to do so.
Not that I know where this security comes from seeing as how in all my years of cashiering, while I have had the occasional pre-1965 silver dime and quarter pass my way, never once has anyone paid me with an American Silver Eagle (1986-present), any of the various American Gold Eagles (1986-present), or Platinum Eagles (1997-present) either at face value (for which you would be an idiot) or at trade value (which as far as I know, my store would not even accept at a percentage of current bullion value).
I understand the basic argument in that you convert your spendable cash into tradable gold which you can then later (and the commercials strongly imply at a profit) convert back into spendable cash by selling them to dealers. The commercials just annoy me because they prey on the ignorant and use their irrational fears to encourage them to part with their money. Gold is already high (at least from my perspective). It's trading in the $1700/tr.oz. range when ten years ago it was under $300/tr.oz. Not that this stops these commercials and print ads from speculating that gold will rise to $5000/tr.oz.
According to an official inflation calculator, gold should only be about $360 per troy ounce today if gold were truly the indicator of the dollar's loss of value its supporters claim (calculation based on the official $20.67/tr.oz. price in 1933 in 2011 dollars). Back in 2001 thanks to countries dumping a lot of their physical gold holdings back in the late 1990s, this gold as an indicator of the dollar's loss of purchasing power temporarily matched actual inflation statistics perhaps giving (re)birth to this idea in modern times (with a little help from Y2K hysteria no doubt). So gold being at $1700/tr.oz. is not the result of inflation (or hyperinflation as these commercials warn is just on the horizon) but speculation and speculation fueled by irrational fears too. I feel bad for those people who will be holding on to their overpriced gold when the bubble finally bursts and it comes down to more reasonable levels.
But then, I also won't feel bad because a fool and his money are soon parted as has been said and really, if you take the time to think about it, if holding physical gold were such an important thing to be doing right now, why is it this company is trying to sell it to you? Magnanimity? Why are they perfectly happy to take your dollars, those very same dollars the commercials and ads are claiming to be losing value and will soon be rendered nearly worthless as per their claims of hyperinflation to sell you their gold? Perhaps if you are the buyer, you think they are suckers to part with such valuable metal for mere paper and ink or perhaps they know something they know you don't...
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