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The Case for Gold

Blog Jun 9, 2016

ITM Trading is a full-service buy / sell precious metals firm that deals in gold andsilver bullion as well as rare gold coins. ITM Trading was founded in 1995 by Craig Griffin. Mr. Griffin envisioned building a firm that would use honest money and bright minds to help Americans secure their wealth. Twenty years later, ITM Trading employs some of the keenest minds in the business and has established a reputation for fairness and honesty. ITM Trading has also helped thousands and thousands of clients diversify out of paper financial instruments and into gold and silver coins and bars. Once the case for gold is explained, owning gold seems logical and wise.

ITM Trading And Lynette Zang.

One of the minds behind the genius at ITM Trading belongs to Lynette Zang. Lynette began working at ITM Trading back in 2002. She came to ITM Trading with solid credentials. Lynette spent her whole life preparing to be where she is right now. Since 1964 Lynette has been a collector of coins, a banker, a licensed stock broker, and a whiz at collecting and interpreting data. Her nickname around the office is “Data Gal”. Currently, Lynette is the Chief Market Analyst at ITM Trading.

When Lynette began working at ITM Trading, the internet was still getting going. Not every house had a computer much less a high-speed internet connection. Smartphones were still yet to be invented. Therefore, the primary way for Lynette to share her information was by land line telephone, one person at a time.

case for gold

Today, we have all progressed beyond land lines. We now live solidly in the information age. This is fortunate for us. Current times are troubled, and they are troubled with financial problems and international political stressors unlike any the world has ever seen before. At some point, the current financial systems will begin to fail, and you will need financial protection.

Lynette’s Webinars

Lynette has put together a series of online webinars that can teach you not only what is really going on in the financial world, but also how you can protect yourself and your family and perhaps even generate large profits during the economic cycle.

If you would like to be notified when Lynette is having her next webinar, just call her at 1.888.696.4653 and get signed up, or email her at LynetteZ@ITMTrading.com.

Lynette’s past webinars can be seen by visiting this ITM Trading website page.

This article, in particular, will try to capture and surmise the webinar entitled “The Case For Gold” that Lynette delivered in June of 2016. Lynette moves fast and makes a lot of great points, so try to keep up!

The Case For Gold In Three Easy Steps.

Lynette Broke down the case for gold into three easy steps. First, gold in the monetary system prevents inflation. Second, gold has no counterparty risk, and third, gold is severely undervalued.

Let’s look at how gold prevents inflation. Lynette offered data to begin making her point. Here it is below. You will notice that The US has historically left the gold standard during times of war, and inflation rises. After war ends and the gold standard is returned to, inflation historically recedes.
case for gold

Lynette also brings up the fact that gold is rare and indestructible. Gold used in chemistry (gold is used more often than you may think by chemists) can be reclaimed; unlike most elements, gold is not consumed in chemical reactions. Also, gold does not rot, rust, or decay.

All the gold ever mined would only fill two Olympic-size swimming pools. A new commercial gold mine takes twenty years to start producing gold, and new un-mined gold is getting harder to find.

Rare Gold Keeps Inflation In Check.

The fact that gold is rare is why governments cannot easily create gold money. Governments create paper money very easily. Back when US paper money was directly convertible to US government gold, there was an accountability of sorts. The government was only supposed to print as much paper money as it could nominally back by gold, at a value of $20 per ounce. This relationship held inflation in check.

In 1933, when the gold coins and notes were confiscated, the ability of the citizens to limit government money creation and keep inflation in check vanished. Gold circulating in an economy prevents inflation.

case for gold

Inflation Erodes The Purchasing Power Of Your Saved Dollar.

Lynette also makes a very interesting point about physical gold, and physical silver, for that matter. Gold can be “created” for financial purposes. ETF’s mimic investments in physical gold, for instance. But, none of the uses for physical gold can be done by any other element or metal. Part of the case for gold is that gold is rare and irreplaceable.

Speaking of concepts, here is another concept that Lynette brought up. What is money, really? In essence, money is simply a way to store excess payment for work you have performed. Money is essentially a type of labor storage.

case for gold

Conceptually, this is why gold works so well as money; you have to work to get it. The dollars of today are mostly imaginary and digital. Billions of dollars can be created in a single moment. Dollars are not a good store of labor.

The Case For Gold : No Counterparty Risk.

What is counterparty risk? Here is a brief definition from financial-dictionary:

Counterparty risk is the risk that the person or institution with whom you have entered a financial contract — who is a counterparty to the contract — will default on the obligation and fail to fulfill that side of the contractual agreement.

Bank accounts, paychecks, IRA’s, 401k’s and even dollar bills all have counterparty risk because the entity backing them may become insolvent and fail. Gold does not have any one entity backing it. Gold is wealth. Gold can be sold and redeemed to anyone at anytime. Paper financial investment instruments simply do not have this ability.

When financial systems fail, counterparty risk becomes a huge factor. The case for gold gets much stronger once you realize that physical gold protects you unlike anything else from counterparty risk losses.

Legal Tender Laws Are Counterparty Risk

Perhaps more frightening than realizing that your bank may fail is realizing that your currency may be outlawed. Legal tender laws are unique and unpredictable. Legal tender laws are the laws that say what is and what is not money. These laws have been changed from time to time in the US. What was once wealth is suddenly no longer wealth because a law gets changed. Below are some examples of US currency that legal tender laws have made all but extinct.

case for gold

If you want to know Lynette’s feelings about financial conspiracies surrounding these notes, you will have to watch the webinar!

Hyperinflation Is Another Risk Factor.

Here is a quick Wikipedia definition of hyperinflation:

In economics, hyperinflation occurs when a country experiences very high and usually accelerating rates of inflation, rapidly eroding the real value of the local currency, and causing the population to minimize their holdings of the local money.The population normally switches to holding relatively stable foreign currencies.

This definition is interesting because it brings up the fact that citizens begin to dump their local currency for foreign currencies. Can you imagine trying to trade dollars for pesos and then spending pesos at the grocery store? How about Canadian loonies? Where would you get those?

The fact is there are plenty of American gold and silver coins right here in this country ready to go back to work as currency. What we don’t know is what dollar value will be associated with an ounce of gold once it does begin circulating again as currency, but we do know it will be much higher than the current $1300 – $1350 / oz. spot price. The case for gold gets stronger as inflation and hyperinflation set in.

Lynette supplied several examples of recent monetary hyperinflation. Here are a couple of her graphics that put hyperinflation, and hence the case for gold, into sharper focus.

case for gold


case for gold

As you can see by recent Venezuelan gold prices and living conditions, hyperinflation is no joke. Hyperinflation is a very real physical and financial threat. Owning gold can protect you from hyperinflation, and ITM Trading can help you build out and take ownership of your physical gold position.

Cybertheft Is Also Making The Case For Gold.

Physical gold cannot be hacked. Pretty much everything else you own can be hacked, and hacking is on the rise. Lynette brought up some amazing statistics during her webinar. She also developed some great graphics.

Hackers have been hitting Central Banks. You might that big government Central Banks would be well protected and immune from hackers, but they are actually easy targets.

Case for gold

Hackers have also been hitting the jackpot at smaller banks. Estimates put hacking losses for 2014 at $900 million. Other estimates are much higher, and this would make sense since banks don’t like to tout their losses and lack of security.

As hackers get better, security has to get stronger. The catch is that better security seems to lead to better hackers. We have a catch 22 situation going on here. Hackers seem to like digital money because it is easy to steal. Hackers are making the case for gold stronger.

The Case For Gold : Extreme Undervaluation.

Lynette has a few financial thinkers that she really admires. One of them is Jim Rickards. If you don’t know Jim’s works, you should do yourself and your portfolio a favor and pick up one of his books. Jim is another very keen mind and he has the credentials and the experience to back up his arguments.

Part of the beauty of Jim’s arguments, however, is that they are firmly rooted in reality and common sense. When Jim figures the dollar values that would be applied to an ounce of gold if the US government were to have to reset the US dollar again, he comes up with numbers between $8,000 and those substantially higher.

case for gold

The extreme variance in future calculated gold values is dependent on factors such as the actual debts of the US and the amount of gold backing applied to the dollar. In any event, the fact that debt levels around the world are astronomical and rising cannot be denied.

Whether or not you believe in gold, debt based currencies, and currency resets, all three exist. Re-visit Executive Order 6102 and the ensuing currency reset that devalued the dollar sharply downward against gold overnight.

Case For Gold

In addition to giving dollar value estimates of coming gold prices, Lynette also explained how other financial paper assets such as stocks and bonds are overvalued right now, but that there will be a time to buy and hold them. For now, undervalued gold is what conservative and speculative investors should be buying.

The Case For Gold : In Conclusion.

Lynette’s webinar neatly summed up that gold as a currency prevents inflation, that gold has no counterparty risk, and that gold is severely undervalued. Along the way she shared some very interesting concepts, truth, history, and common sense. She also shared some really good advice: Own Gold.

ITM Trading has a strategy in place to position you to benefit from the coming market fluctuations, And Lynette would like to continue to share this strategy with you and help you develop a financial portfolio unique and beneficial to you.

Please join us for Lynette’s upcoming webinars. At ITM Trading, we are here to be of service.

Video 32 Minutes 43 Seconds

Disclaimer: The information in this Webinar has been carefully compiled from sources believed to be reliable, but the accuracy of the information is not guaranteed. The author, Lynette Zang was a licensed investment advisor but no longer maintains those licenses. This broadcast is not intended as investment advice. The opinions expressed are those of the author. Neither Lynette Zang nor ITM Trading can guarantee that any products offered by ITM will rise in value. You should be aware that prices will fluctuate and may go down as well as up. Strategies mentioned in this webinar may not be suitable for you. Past performance is not indication of future profits. Before purchasing coins you should read ITM’s Risk Information and Purchase Policy documents. Coins should be considered a long term hold for a portion of your investment portfolio. If you have any tax or other questions please consult a financial professional. ITM recommends that 5 to 20% of your overall investment portfolio be placed in precious metals, however the decision as to how much to allocate is strictly up to you and/or your financial adviser.
Thumbnail Photo We believe that everyone deserves a properly developed strategy for financial safety.

Lynette Zang

Chief Market Analyst, ITM Trading

Sources & References In This Article

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