Times change, but some things never do. This old adage can definitely be applied to owning gold. For throughout history, the majority of time owning gold and silver was seen as a true sign of wealth. Only kings and very rich men had vaults stuffed with gold coins and gold bars. Some notable figures throughout time have been collectors and admirers of rare coins as well. Today, those that choose an alternative route to saving in banking products and fiat currencies and buy gold and silver instead can be labeled as “conspiracy theorists” and “tin-foil hat wearers” among other colorful things.
“Gold Is Really Worthless, You Know.”.. And “You Can’t Eat Gold”
One of the first rules about owning gold is to not talk about owning gold. Gold is highly liquid and it can be very difficult to trace, and of course because of it’s very high value and ease of portability, gold coins and gold bars are prized targets for thieves. Always be very careful when discussing your precious metals holdings. But, let’s say you were particularly proud of a pair of Proof American Gold Eagles you had just received and you chose to show them to a friend. “Those are nice.” He says, “But you, know, gold isn’t really worth anything – I asked my nephew- he’s a stockbroker, he knows these things.” or perhaps he says something like, “Oh, your one of those! Saving up for the end of the world! Maybe the zombies will want your gold coins and your gold bars! You can’t eat gold, ya know!” Hopefully your friends aren’t like that, but we know those people are out there.
They Are Supposed To Be Out There
For decades and decades now there have been little social changes in the way that the currencies and money have evolved to where they are today. What was commonplace is now rare, and what was impossible is now commonplace. Let me explain. A hundred years ago, if you rode into an American town with nothing but a horse, a checkbook, and a pen, chances are you would probably end up sleeping next to your horse. If you had a few silver or gold coins in your pocket, however, the town could be yours. Today, almost no one writes checks. And nobody, I mean nobody, takes gold and silver coins for payment for a hotel room, horse lodging and feed, or even a couple of drafts down in the saloon.
Next, I’ll share some of the ways we conduct financial transactions have changed. Please read on, and please keep stacking your gold coins.
In part one of “Keep Stacking Gold Coins” this article-blog touched on a couple of the stereotypes that those that choose to save in precious metals are given; the tin foil hat wearer, the zombie apocalypse guy, etc. All, in all, nothing has changed since first grade.
There are people out there that are instinctually hardwired to make fun of anything that they don’t understand or find commonplace. Today, choosing to keep your wealth in American Gold Eagles, gold bars, gold coins, and numismatic gold coins hidden in a wall safe behind a painting of a Dutch landscape in your library is not commonplace. Saving in gold coins at all these days is not commonplace, yet it used to be…
Remember The Days…
Remember when you used to stop and pick up a penny? Pennies used to be made out of copper, and dimes used to be made out of silver. Therefore, one hundred pennies would be worth ten silver dimes, or one silver dollar. Today an ounce of silver is about twenty dollars. That means that the penny you used to stop and pick up had the purchasing power of two of today’s dimes. Would you stop to pick up two dimes?
Remember When You Used To Have A Check Guarantee Card?
The Check Guarantee Card was a funny little orphan that existed for a brief period of time in the banking world. At first there was cash. Then there was credit issued by local vendors (the grocer, the butcher, the barkeeper, etc) that went along with your cash. Then checking accounts were introduced, and they eventually caught on, although in the beginning, accepting a check was very little more than accepting a promise. Then, almost overnight it seems, technology caught up to the pen and ink checkbook system.
The banks were purchasing computers that would let them store and manipulate data in ways there programmers and actuaries had never even dreamed of. And all of this data was going to exist in one little area of prime real estate, the black strip on the back of a card that no one was carrying. That’s right. Your check guarantee card (which later morphed into your debit card) was your set of training wheels teaching you to carry a banking card that could track and record all of your financial transactions and whereabouts.
Cash didn’t tell the tale of where you had been or what you had bought. Checks would tell part of the story, but in the end they could never give up any more information than what was printed on them. The records that are generated by swiping a debit card (or credit card for that matter) are numerous and their very existence opens you up to problems such as identity theft. Rare gold coins and numismatic gold coins have watched time come and go, change and change again. Perhaps it is the stability and certainty of gold that attracts certain people to own it.