Cry Gold – Cry Wolf

Most people are familiar with the Aesop fable “CRY WOLF” about the little boy who falsely called out Cry Wolf too often to his villagers when there was no wolf around. Then when one day the wolf came and the boy again cried, no one believed him and the consequences were fatal for the flock of sheep.

I (and a few others) have Cried Gold for 20 years but less than 0.5% of global financial money is invested in gold so very few have listened to our cry.

GOLD HAS OUTPERFORMED EVERY ASSET CLASS THIS CENTURY

It is even more surprising since gold has outperformed virtually every major asset class in this century as well as all currencies. The dollar is down 85% against gold since 2000.

The Dow down 67% since 1999 (excluding dividends).

As a rule, mankind ignores history and therefore forgets that credit and printed money don’t equal wealth. So today’s conventional wisdom says that gold has little purpose in the modern world. But what you learn from a long life is that these beliefs contain no wisdom but are merely conventional.

“GOLD HAS BEEN A POOR INVESTMENT”

Most investors are not even aware of gold and the ones who are don’t understand it. For millennia people have kept their savings in gold but “today it is different”.

And who can blame people who disbelieve gold. When the media talks about gold it is normally in a disparaging way. They will start with the 1980 peak at $850 and point out what a bad investment it has been as gold declined for 20 years and didn’t reach 1980 high until 2008.

The fact that gold was $35 in 1971 is never mentioned and then moved up 24x until 1980 or that gold today is up 5,300% since 1971.

Even more importantly, neither journalists nor investors understand that gold doesn’t go up at all. Since gold represents constant purchasing power, it is not gold that goes up but the value of paper money that goes down.

“GIVE ME CONTROL OF THE MONEY……”

The last 100 years since the creation of the Fed has been a shameful period during which the rich and powerful have controlled the financial system. This has given them access to limitless funds at the expense of ordinary people.

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