Gold — Most people don’t understand the meaning of gold. People who buy gold today are thinking of climbing on the band-wagon and ending up with fabulous profits. Forget it, that isn’t why you buy and own gold. Besides, the government won’t let you show a profit in gold. The IRS will tax your ass off if you try to sell your gold mining stocks or your gold-related ETFs or gold funds.

The reason rich men accumulate gold is as follows. Gold is eternal wealth. Own three thousand ounces of gold, and you’ll always be wealthy. Holding gold entails no risk. Gold owes its value to its indisputable intrinsic value. You want to ensure eternal wealth? Pretend you have to make that decision, and it’s the year 1990. You load up on three blue chips, GE, GM and C. If you loaded up on these three, by now you’d be broke.

You want to feel wealthy in any kind of market or in any kind of political system? One way is to own physical gold. A great inflation materializes and your gold will probably rise with inflation. A great deflationary depression arrives. The price of everything crashes. And worst of all, that bubble that we call the dollar crashes as well. The dollar won’t buy a damn thing. Nobody will part with food or land or merchandise for dollars. All things denominated in dollars (stocks, bonds, real estate) collapse with the dollar.

Holding gold itself is a standard of wealth. You never sell your bullion gold. But when you buy gold mining shares, you are speculating on making a profit. If I own enough gold, I don’t care what the dollar the price of gold is. I’m a wealthy man as long as I hold my gold. If I own five Picassos I’m a wealthy man. If I own 20 acres on the Southern California coast I’m a wealthy man. But Picassos can go out of style. And land on the California coast can be confiscated. Not so with gold. Gold can be hidden, it can be accumulated, and it exists outside the system. By the way, I’m wondering whether great diamonds will soon be in that same category. I note that the price of great, high-quality diamonds is surging.

What man makes, man can destroy. The value or purchasing power of the dollar (fiat currency) can collapse. But gold cannot be devalued, because it’s not beholden to any man or any sovereign government. Gold’s value is based on 6,000 years of history, and its value lies outside the system. The US Treasury now values its gold as $42.20 an ounce. The world doesn’t give a damn what the US Treasury values its gold at. The world is saying that an ounce of gold is worth $1250 dollars, and the hell with the gold-haters.