Momma Mia!
a piece of R. Russell's end o year comments:
GOLD -- Here's something that made me blink, do a double-take, and shake my head in disbelief.
Blanchard & Company, the outfit started by Jim Blanchard that lived, breathed, and swore by gold, is dumping gold like a bad habit.
Honest, they are. Gold, money since the beginning of civilization, goes dormant for 20 years and Blanchard & Company throws in the sponge. Damn. I couldn't believe it.
Here are a few items from the Blanchard mailing.
"Effective as of January 1, 2002, Blanchard and Company is changing its business practices and policies in order to limit its exposure to falling gold prices, and recommends to its clients that they do the same. As of that date Blanchard will not maintain inventories of gold bullion or gold bullion products, nor will it market gold to, or solicit gold sales to, Blanchard clients. ...
"Gold is caught in a bear trap, If the price of gold goes up, the institutions and corporations that have the most money, the mot gold, and the most information about gold and the most ability to influence gold's price, lose money. Recent events have proved that those institutions and corporations have the power to slam the brakes on any increase in the price of gold, no matter how compelling the macroeconomic story behind the increase may be.
"Gold is no long a hedge against inflation, devaluation of the dollar or falling stock prices. It is no longer a store of value. The very idea of gold's intrinsic value --value that is not dependent upon the actions or promises of any government -- is publicly questioned by senior central bankers, and by the heads of major financial institutions."
There's a lot more but I think you get the idea. What do I think of the Blanchard & Co. turn of events? I think if my old friend, Jim Blanchard, read the above, he'd turn in his grave. I think that Blanchard & Co. is probably not doing well in the gold business and they're smart to get out of it. I also think that Blanchard & Co. is dead wrong about gold. But "to each his own." My guess, however, is that gold will be around and considered to be money long after Blanchard & Co. ceases to exist.
Twenty years of central bank baloney will not void the value of gold. Twenty years of declining gold prices against paper currency proves nothing except that people will believe a lie if it is repeated often enough and loud enough by the prevailing authorities.
The lie? The lie is that paper money issued by governments and proclaimed as legal tender has finally triumphed permanently over gold.
Governments have tried for centuries to produce their own paper money while denigrating or even outlawing gold. Has never worked for long. The Chinese were the first to issue paper money. But you know something -- the Chinese love gold. |
