You can’t eat gold. Gold produces no income. Gold is just a worthless barbaric relic. It's an expensive paper weight.

Gold doesn't do anything.

You hear these statements as criticisms against gold. But they just don't jibe with reality. I can't eat coal, but no one denies that coal has any value or use.

My car produces no income, but no one makes fun of me for owning one.

So what does gold actually do? People who own gold understand that it preserves capital. Sure, you can nitpick slim periods of time when buying gold would have lost you money - but those times are few and far between. They typically follow some of the biggest run-ups in gold's price over history.

But besides these things that gold owners know - there are a few big questions that need to be answered. Like, for instance, if gold has no value, no use - if gold is a barbaric relic, and if gold doesn't do anything...

Why then, would Egypt ban ALL gold exports as they did over the weekend?

Notice, Egypt didn't put a ban on cash leaving the country. They didn't ban oil exports, or camels or widgets - they banned gold!

Here's the entire story from Reuters:

“Feb 27 (Reuters) - Egypt has issued a ministerial decree immediately banning the export of gold in all its forms, including jewellery and ornaments, until June 30, the official news agency MENA said on Sunday.

"This decision, which comes in light of the exceptional circumstances the country is passing through ..., is to preserve the country's wealth until the situation stabilizes," MENA said.

Egypt's currency has come under pressure after some of the country's main sources of foreign currency, including tourism and foreign investment, collapsed after the protests that ousted President Hosni Mubarak erupted on Jan. 25.”

If gold has no value, if gold has no use, if gold is worthless…why would Egypt ban its export under the guise of preserving the country's wealth?

To reiterate the point, the Egyptian pound is still free to leave Egypt's borders. The government doesn't care about the fiat currency, only the gold one.

Learn this lesson now: when times get tough, governments don't care about paper money, but they do care about gold.

Today, it's still legal to take gold out of the United States.

You might be thinking, “It couldn't happen here.”

Well, it certainly could happen. Is it likely to happen? I don't know.

But if it does happen - are you prepared?

Good investing,

Kevin McElroy
Editor
Resource Prospector