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‘Gold Bugs’: Does Investing in Gold Make You Paranoid or an Economic Realist?

Posted on June 19, 2012 at 9:55pm by Becket Adams
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[Author’s note: the following is a cross-post that originally appeared on Wall St. Cheat Sheet]

Quality questions create a quality life. Successful people ask better questions, and as a result, they get better answers.”-Tony Robbins

Gold bugs are often made out to be doom and gloom nervous nellies that camp out somewhere deep in the wilderness. Uncivilized and irrational, they count their lifeless and barbaric stacks of gold and silver bullion, along with cans of baked beans. All while wishing for the entire collapse of the financial system and ushering in a Mad Max world.

A gold bug?

But, is this view really true? Are gold bugs just realists in today’s economy? The answer is obvious to anyone paying attention to the global debt crisis unfolding before our eyes.

Contrary to some pundits, the majority of individuals who hold precious metals are not merely pessimists, but rather people trying to take responsibility for their own financial well-being. In fact, gold bugs have one of the most optimistic spokespersons on their side of the coin. Tony Robbins is one of the world’s most recognizable motivational speakers. He was ranked among the “Top 50 Business Intellectuals in the World” by Accenture’s Institute for Strategic Change, and considered to be one of the “Top 200 Business Gurus” by Harvard Business School. He also believes that “the meeting of preparation with opportunity generates the offspring we call luck.”

Naturally, he is bullish on gold.

Robbins recently warned about the risk of fiat currency devaluation and discussed the opportunities in gold, which is “exploding” and “in a bull market,” according to GoldCore. The firm also reported the following:

[Robbins] spoke about investment experts who he respects and specifically mentioned Marc Faber and Kyle Bass … Faber and Bass are extremely bearish on paper currencies and government debt, and are very bullish on gold and silver bullion due to the eurozone debt crisis and looming global debt crisis due to the appalling fiscal state of Japan, the UK and the US.

Faber is a Swiss investor who famously advised his clients to exit the stock market one week before the 1987 crash. Most recently, he called U.S. Treasuries the biggest bubble ever and says the odds for a global recession is 100 percent. Meanwhile, Bass is the founder of hedge fund Hayman Capital and successfully predicted the meltdown in subprime mortgages.

Gold is more than just a hedge against economic uncertainties, it is insurance against the actions of governments and central bankers around the world. Bass once eloquently explained, “Buying gold is just buying a put against the idiocy of the political cycle.” The global financial system is now facing massive debt loads and gold investors are simply taking notice, preparing for the opportunities that tomorrow will bring because, after all, the sun will still rise tomorrow. Instead of being viewed as pessimists, gold investors should be seen as realists.

Money isn’t everything, but it sure helps. If people are unable to access their money, it will be extremely difficult to take advantage of any opportunities that market turmoil may provide. The people located in the eurozone are quickly realizing this hard truth … countries are beginning to introduce capital controls in order to maintain the status quo of fiat currencies for as long as possible.

Last week, it was reported that Bank Network Investments in Italy froze all customer accounts for one month. Furthermore, Reuters recently announced that European finance officials have discussed limiting the size of withdrawals from ATM machines and implementing border checks.

In a world of debt loads and stimulus programs in the multi-trillions, placing all your eggs in one currency like the dollar or euro appears to be a dangerous decision to protecting your financial well-being. Unlike paper currencies, gold and silver bullion do not carry counter-party risk that can make it difficult or impossible to access your capital and build a brighter tomorrow.

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Comments (41)

michael from Ga.
Posted on June 20, 2012 at 3:02pm
Everyone should have a Gold Mind. Before this year ends, many will know what is of value, and not of value. Gold and Silver are a basic must have – where does it come from? Dirt / land. We have been warned for thousands of years to be careful of deception. Double taxes, or hidden [inflationary finance] are an idication of judgement on the land [1Sam.8:7-19]. Prophet Samuel calls it wicked. The Lord gave us dominion over the earth, including trees and cotton-which comes from the dirt; then the deception is that #s are printed on the stuff from the ground and we then worship the stuff. It is idol worship, and represents debt, which is a no no. Debasing currency is wicked.
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762x51
Posted on June 20, 2012 at 2:15pm
Jezcruzen
Posted on June 20, 2012 at 7:15am

OH… so you think that in a crash you will still be able to get reloading components? Thats a bit short sighted, pal!

Precisely why I stockpile components on an industrial basis. I process in batches of 5,000 rounds or more at a time so I have that covered. Most people either do reload at all or cannot work in those quantities. I do not consider ammo as a barter item as it can be used against you so this for my own use to hold my ground and for offensive combat operations as the opportunity presents.

I agree seeds are problematic. Even if one has the skills and ground, they must still defend and hold that ground and retain the produce until it can be consumed against starving masses. They would also need up to one year of stored food to survive until such a garden can be brought to harvest. Seeds can make good barter items though to gain an immediate benefit or critical need.

I was just trying to list categories in a priority order which is why potable water tops the list. Dying of thirst in a week would obviate the need for seeds or reloading components. Someone else mentioned protective clothing, a reasonable thought but most of us who live in areas where winter is a reality have that stuff on hand already. A separate focus might be protective clothing for specific purposes, i.e., the aforementioned combat operations, NIR compliant, flame retardant, NIJ IIIA body armor, hard knuckle operator gloves, etc.
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Joe Bonham
Posted on June 20, 2012 at 10:49am
If society collapsed, your gold wouldn’t help you. You would just be robbed and killed for it. Instead of being a paranoid creep, how about getting together and making friends with your neighbors? Strength in numbers – survival is accomplished by teams, not individuals. Individuals die, communities survive.
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- jkrush
  Posted on June 20, 2012 at 11:51am
  Even being polite, I can’t get my neighbors to muzzle their dogs at 3 a.m or get them to stop parking on their lawn. I‘m pretty sure they’re not interested in being cooperative in an economic crisis. People like me, who own gold, also own a lot of lead. Nobody will be killing me and taking my gold without a lot of lead to go with it. King Arthur and Salah ad-Din bought horses in the middle of nowhere with silver during the Crusades: before banks, before credit, and before paper fiat currency. How did the Nubians pay their tribute to the Egyptians more than 3,000 years ago? Why, gold ingots, of course! The proverb is “he who has the GOLD makes the rules”, not “he who has the fiat paper currency makes the rules”. How did Diocletian accelerate the decay of the Roman empire? The minting of metal coins that were of low metallic value. This lead to severe inflation… because… wait for it… wait for it… the Romans dismissed the intrinsic value of gold and silver! You should get the point by now. The intrinsic value of precious metals stays the same, regardless of the so called “value” of fiat currency.
  Report Post »
- Texas Chris
  Posted on June 20, 2012 at 12:07pm
  A well armed society is a polite society.
  
  That, and people who are saving (as opposed to “investing”) in gold are also the people who are stockpiling food, weapons and ammo, drilling water wells, fortifying their homes, and building coilitions with friends and neighbors.
  
  Owning gold is just a small part of beiong prepared. But it IS a part.
  
  The old crap that “you can’t eat gold“ or ” gold won’t be accepted” is just that: crap. Historically, gold has ALWAYS been accepted.
  Report Post »
Secret Squirrel
Posted on June 20, 2012 at 10:16am
.
“Does Investing in Gold Make You Paranoid ”
Just remember, just because you’re paranoid,
doesn‘t mean everything’s really fine.
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- Texas Chris
  Posted on June 20, 2012 at 12:04pm
  Blaze needs to understand the difference between “investing” in gold, and “saving” in gold.
  Report Post »
vaman
Posted on June 20, 2012 at 9:01am
Gold is the current bubble and it will burst one of these days. About $1700 an once is it? When the price of gold collapses to about $1000-$1200 an once, which is the real value, how will beck and his gang explain when people have lost everything on his advice or the advice of similar people?
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- undercover
  Posted on June 20, 2012 at 10:37am
  If gold value was to keep up with it’s inflation adjusted valuer it would be about $2500.00 per oz. Still a ways to go before it tops out.
  Report Post »
- JRook
  Posted on June 20, 2012 at 11:12am
  I’m sure Goldline appreciated this “advertisement” report. Seriously, do the GB followers really fall for this stuff. Gold is and has always been negatively correlated to economic conditions and economic perceptions. When Europe figures stabilizes and the US economy gets stronger, gold will drop just as fast as it went up. It is a commodity that is best played during an economic downturn, unless of course one has the balls to short it during and economic boom. But keep in mind Goldline, and companies like them make money on the way up and on the way down. As do the companies they advertise with.
  Report Post »
- 762x51
  Posted on June 20, 2012 at 2:22pm
  Why would Glenn Beck need to explain anything. He is not forcing people to buy gold, he is just providing a advertisement as a paid spokesman for a business that hired him to perform that service,
  
  People make their own decisions on whether to buy gold or toilet paper, the real gold of the collapse. Only a collectivist commie would think anyone should explain or apologize for the decisions of others. Man up and take some personal responsibility.
  Report Post »
expatinontariocanada
Posted on June 20, 2012 at 8:44am
God, guns, gold, groceries, gasoline and ground.
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lukerw
Posted on June 20, 2012 at 6:39am
It all depends upon the amount of Wealth that you have to shelter into Gold!

Historically… upon an Economic Failure… a Black Market appears, where Gold is always the Standard of Barter… dating back to Ancient Egypt!
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- historyguy48
  Posted on June 20, 2012 at 6:55am
  Actually that isn’t entirely true. Black markets trade in stock is usually food, cigarettes, booze, bullets and medicines. You can eat gold, it makes horrible toilet paper, and really isn’t very good or bullets.
  Once the dust has settled, then precious metals, jewels, etc. play a larger role. But, usually strongmen consolidate power over their area and merely take your horded gold. What will be different this time?
  Read the E-book Death of Civilization; the Apocalypse Begins. He is reasonably accurate with the scenario envisioned.
  Report Post »
- 1592
  Posted on June 20, 2012 at 7:54am
  I’m sure glad I was Paranoid 7 years ago.
  Wait, Does that make Me stupid or Tony?
  Report Post »
- lukerw
  Posted on June 20, 2012 at 8:30am
  @HISTORY…
  I do not recall… Cigarettes, Medications, nor Bullets… in the Ancient Past… nor even a thousand years ago. Of course, one can Barter anything with another… where Value is based upon Need. But Barter Systems demand a Concept of a Unit of Value… and that has always equated to Money, Foreign or Classic, which equates to Gold. Diamonds have an artificial Value… not Rare… and tend to be Sucker Money. And, Toilet Paper was only invented a few hundred years ago.
  
  Food is what people are Trading for… and the Currency must be portable and not subject to decay!
  Report Post »
- Bryan B
  Posted on June 20, 2012 at 8:35am
  There has to be someone to put value on the Gold, like government, if not, Gold will be worth nothing.
  
  If a complete financial collapse where to happen, there would be little or no government at all. Bartering would probably be your best bet.
  Report Post »
- lukerw
  Posted on June 20, 2012 at 9:21am
  @BRYAN…
  After a Fall… Civilization seems to Restart in an Area of Militia Control… where Food & Protection go hand in hand… and where a Militia Leader sets the Barter Standards. Feudalism!
  Report Post »
- Bryan B
  Posted on June 20, 2012 at 12:54pm
  @lukerw
  
  “After a Fall… Civilization seems to Restart in an Area of Militia Control… where Food & Protection go hand in hand… and where a Militia Leader sets the Barter Standards. Feudalism!”
  
  “Militia Control ”couldn’t happen in the United States, people here are to rebellious……
  Report Post »
Hoax And Chains
Posted on June 20, 2012 at 6:29am
So… when the economy and society goes to hell, where do I spend my gold? I think I’ll invest in clothes, food, SEED, and ammo. That’s immediate necessity that will be met… you can’t wear, eat, or plant gold and all you do is throw those one ounce chunks at someone trying to steal what you have… No thanks. I’ll pass on the gold.
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- expatinontariocanada
  Posted on June 20, 2012 at 8:37am
  Gold (or silver) is what you give to the boat driver to take your family across the river…
  Report Post »
Bryan B
Posted on June 20, 2012 at 5:12am
If things where to break down in our country, and get to the point our money is worthless. There is going to be no where to go. You will not be able to hide anywhere. You will have no choice but to raly upon others for help, if not, you will not make it. Start talking and working with other people now, because if it happens, it will not matter how much food or gold you have stored up, and you will never have enough bullets……
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- Godzgrl247
  Posted on June 20, 2012 at 5:57am
  Exactly! I‘d say you’d better be investing in good shoes and protective clothing because you’re probably going to be mobile.
  Report Post »
MRMANN
Posted on June 20, 2012 at 4:37am
For the past 10 years, my brother has invested in gold & silver. He is no pessimist–he is a realist.
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Canada_Goose
Posted on June 20, 2012 at 2:50am
Is this a business story or an ad?
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kindling
Posted on June 20, 2012 at 1:07am
buy bulk from places like Costco and dry it. Also invest in plants like Moringa which is easy to grow and will also keep you alive. Store seeds you can sprout, it is a meal of fresh greens in a few days to go with the dry stuff you store. We need to teach our kids how to do this stuff because their lives are going to be vastly different than how we grew up. We may be going back the 1800 and there isn’t anyone to pass on the knowledge. A man living her illegally from south of the border is going to teach me how to butcher animals. They come from a country where they live as we did 150 years ago and have the knowledge of some of it.
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kindling
Posted on June 20, 2012 at 1:01am
I am 60, in fair health and a broken back and neck. I have had 2 metal car ports covered with plastic and made into green houses. I grow hydroponically using animal droppings to make tea for the water in the system. There are very few bugs, no gophers, and it uses 2% of the water it would take to grow in the ground. Even with no power I can still run them. I grow all kinds of greens and herbs all year round. With the two green houses, goats, sheep, and chickens we have food pretty much coveren. We do have all the lead too, stashed where it is most needed. I wish we lived closer to a river full of fish.
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22AUTOMATIC
Posted on June 20, 2012 at 12:48am
If the Obama administration really wanted to engineer a recovery, they would have to bend more effort to rallying the stock market. (Evidence shows that stock market crashes increase the chances of a deep depression.) Silly me. I was thinking of amendments to Obama’s counterproductive policies of raising taxes on investment returns. Little did I imagine what has now become clear: Obama and his Treasury secretary rigged the stock market to rally by pumping billions of tax dollars into major global banks behind our backs. Remember the big fuss about the bonuses paid to executives of AIG Financial Products division (AIG-FP)? The ones who were promised the moon and the stars if they would stay put in Greenwich and unwind billions of dollars of default protection they had sold? Of course you do. Congress fulminated about it for a week. Talk show hosts talked of lynching. And a distinguished member of the Senate Finance Committee suggested that AIG’s bonus babies should first return the money and then commit suicide. A congressional hearing even grilled, AIG’s CEO, Liddy, about the scandalous bonuses, which the House ultimately voted to confiscate with a 90% retroactive tax. (Liddy took the job for a dollar a year as public service. This didn’t spare him Congress’s staged wrath.) You remember all this fuss and fury? It was hard to miss. But the whole hullabaloo was merely political theatre designed to keep the public from inquiring how AIG came to lose billions in tax d
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hyndsyte2020
Posted on June 19, 2012 at 11:28pm
You own only what you can successfully defend against those who did not plan and do not care what they take by force. If you wish for a “mad max” world, you are deluding yourself into thinking you can do this against anything more than small wondering hopeless bands of people. Anything more organized than this will overwhelm all those “ lone wolf” survivalist types once they are scouted out.
If small communities come together to not allow the both the rules of basic humanity and the idea of private ownership of property to be disregarded by enforcing basic rules of law and provide resources to those how wish to join the community, and share in its labors and defense, then some semblance of society can be maintained. If not, you have civil disintegration, famine,pestilence, murder and rape as norms – think Somalia, only on a continental scale.
Silver makes more sense than gold as a currency as it’s value is small enough to allow basic trade to continue on the individual level.
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- 762x51
  Posted on June 20, 2012 at 2:39pm
  Depends on the level of preparation and terrain not just the numbers of invaders. In terms of a fight, most single family homes with a husband, wife and 2.4 kids are technically a lone wolf scenario because there is only one real combatant, the husband, present. My defenses are set up so that taking my place by force is going get real expensive right away. Sure 20 or 30 heavily armed aggressors could over run me but they will only be dividing up the spoils 5 or 6 ways when the smoke clears. No group will take on a fight with a 75% casualty rate when other alternatives exist. You kill the first five through the door, volunteers get scarce after that. These people aren’t Force Recon Marines most will be criminals or the chronically unprepared. Most groups like that will find easier targets that is the nature of marauders throughout history.
  Report Post »
762x51
Posted on June 19, 2012 at 10:25pm
In a “Mad Max” scenario even gold is worthless. The seven base items you should be focused on to survive, in order are:

water, food, fuel, medical supplies, weapons, ammunition, alternative exchange currency. That last one might be gold but it could also be liquor, cigarettes, fishing tackle, etc. For the the cost of one ounce of gold I can buy and vacuum seal a truck load of cigarettes or fishing tackle. Plus cigarettes are much easier to transport than gold. At that point 100 gallons of gasoline will be worth 100 pounds of gold. I do have some but it is far from the end all be all of preparation.

Besides with the lead I have, I can get all the gold I want.
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- ShyLow
  Posted on June 19, 2012 at 11:33pm
  Protective clothing should be high on the list,a person could freeze to death before they have a chance to starve to death.Clothing is also a good thing to barter with,and also the ability to make clothing.Bread bags to keep your socks dry could be used to barter and worth saving,shoes will eventually get holes in them
  Report Post »
- THXll38
  Posted on June 19, 2012 at 11:47pm
  Indeed. In a Mad Max scenario, lead, primers, brass, powder, and a reloader are mans best friends — then the dog.
  Report Post »
- Jezcruzen
  Posted on June 20, 2012 at 7:15am
  OH… so you think that in a crash you will still be able to get reloading components? Thats a bit short sighted, pal!
  
  Gold and silver will always be accepted currency. It has throughout human recorded history. Other goods, too, but not to the exclusion of PMs.
  
  To those of you stocking up on seeds, have you ever raised a garden? Do you have the knowledge.. the tools… the space? (Ever tried turning hard ground by hand?) Do you have the means to preserve what you grow, (if you can even grow anything!) Can you do everything without electricity?
  
  Maybe you are one of the fools with your BOB all packed, thinking you will just hoof it off to the wilderness from your apartment and “live off the land”. How long with those MREs last? *laugh*
  
  Bottom line is this – if you are not already living where you need to be and established yourself within a community, and you are not now using and perfecting the KSAs necessary for a very different and difficult existence, you are toast! When you flee the “ghetto rat” infested cities (if you can) don’t expect to be welcomed out here.
  Report Post »
- undercover
  Posted on June 20, 2012 at 11:13am
  I can carry an oz of gold around in my pocket or hide it anywhere – try that with a truck load load cigarettes or a 100 gallons of gasoline.
  Report Post »
ShyLow
Posted on June 19, 2012 at 10:21pm
True security will not come from a yellow rock.
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- Joe Bonham
  Posted on June 20, 2012 at 10:46am
  Sadly… your post SHOULD have been obvious common sense… but apparently not! Thanks for spelling it out for everyone!
  Report Post »
macpappy
Posted on June 19, 2012 at 10:14pm
I buy a Silver Eagle every week, and have been since Silver sold for 4.60 an ounce. Best investment I could have made. If all goes well, I can sell at any time.
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Baddoggy
Posted on June 19, 2012 at 9:59pm
Makes me the smartest man in the room. Along with my lead, silver , food, water and other plans, I am very prepared. Gold is just the icing.

And for those who say I cant eat gold…You are as stupid as they come….
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- TSUNAMI-22
  Posted on June 19, 2012 at 10:15pm
  If you can physically guard it with an AR-15 you’re doing the right thing.
  
  Here’s an excerpt from a post found here tonight http://barnhardt.biz/index.cfm
  
  “Finally, Greece is giving us a preview of what is eventually going to happen here. The Greek people are realizing that their economy is dead. What they are now doing is pulling cash out of the banks…………”
  Report Post »
- possom
  Posted on June 19, 2012 at 10:22pm
  I’m covered!
  Report Post »

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