Ready To Buy More Gold

I just accepted my 4th part time job. My schedule will be 11 hours a day Monday through Friday and 5 hours on Saturday. It is a lot of work but the good news is that the money is going to start flowing in. What will I do with it?

The absolute best investment in my eyes would be a rental property. However, I don’t really have the time just now to go out and find a really great deal. Plus, I’d have to manage the tenant and perhaps do some repair work. It just wouldn’t be practical. My retirement plan is buying rental properties at some point in the future.

The stock market is on the upswing. But I’m not willing to go anywhere near stocks. First, the fundamentals of the American (and world) economy are frightening; way too much debt. Second, its an election year and stocks always go up in election years. After November, who knows what could happen? Third, once you buy the stock, you have no control over the outcome. It is up to fate, JP Morgan, and Goldman Sachs to determine the outcome. Way too much risk.

Government bonds are supposedly risk free and pay a bit of interest. I won’t go near these either. If you loan money to the government, they’ll just spend it on killing people overseas, hiring more bureaucrats to harass individuals and business owners, and paying subsidies to rich people. In other words, they won’t do anything productive with it. They’ll just need to tax you later to pay you interest on the money that you loaned them. Yes, you will paying interest to your self. Pretty weird huh?

Further, the sovereign debt crisis in Europe is surely a harbinger of things to come in the U.S.. You can’t run trillion dollar deficits every year, in addition to 70 trillion or so in unfunded entitlements, and expect the investing public to loan you money at low interests forever. Rates on US debt will spike and that will kill investors who have money in US debt. The question is, when will that happen? Who knows. Probably not for a while. But theoretically, it could happen any time.

Government debt: too immoral, to unsafe.

Corporate bonds could be good but I don’t know enough about them. There are no financial advisers that I trust in town to make me a recommendation. I worked in the financial service industry for a stint and that soured me on professional investment salesmen.

A bank CD looks somewhat attractive. A little bit of interest. FDIC insurance in case the bank goes belly up. Ultimately, the interest payment is just to unattractive. Also, I have to pay tax on the interest, unbelievable. I could put the CD in an IRA and defer the tax on my returns, but then it wouldn’t be liquid.

That leaves one option, my favorite option, gold. I’m a gold bug. I’ve inculcated myself with too many books on free market economics not to be. Given the nature of the debt problem and the specter of more wars, it is obvious that more and more money will be printed. Gold can offer protection against that.

Gold coins are a good way to have some assets off the grid. Yes, the coin shop will report your purchase to the government. But after a time, your transaction will become just another of the billions of transactions that have been reported. No government official will be any the wiser.

Gold coins are liquid. There are tons of buyers for gold at any given moment.

Even in the quite unlikely event of a full blown deflationary crash, gold coins have historically done well. The price of gold tends to fall at a slower rate than other prices providing gains in real terms.

Finally, trading in government money for gold is a vote of no confidence against the existing regime. Gold can’t be created electronically. Its quantity can’t be manipulated by politicians. Its a market money. Buying gold coins is a way to thumb your nose at the suits that run the country. Its a way to opt out of a broken system and support the free market.

We recently moved and there appear to be a few good coins shops here in town. I just need to head over to one and add to my collection. I can’t wait!

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One Response to Ready To Buy More Gold

  1. Pingback: Practical Economics and the Conspiracy Distraction « JRFibonacci's blog: partnering with reality

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