SHOW NOTES 11/25/14

5 Reasons Why I Own Gold

Plus, an important update for silver investors and U.S. stock investors

FTMDAILY.COM On todays program, Jerry Robinson discusses precious metals investing, with an emphasis upon gold. Jerry puts forth five important reasons why he owns physical gold for the long-term.

Later, veteran precious metals advisor, Tom Cloud . joins the program with a timely update on the recent action in the gold, silver, platinum and palladium markets. Tom also offers an incredible low-cost premium for American Silver Eagle coins .

Transcript of todays show

SEGMENT ONE: 5 Reasons Why I Own Gold

Many of you know that I have been talking about the benefits of owning gold for as long as this podcast has been in existence. I still hold to the belief that gold, along with other tangible assets, will be the primary beneficiary of Americas economic woes.

Here are five reasons why I own physical gold today, and for the long-term.

#1 Gold is Money

For millennia, humans have considered gold as the ultimate store of value, unit of account, and medium of exchange.

In other words, gold has long been viewed as money . No amount of paper money can change this fact.

In recent years, mankind has foolishly believed that paper currency, issued by government fiat (decree), somehow has the innate ability to replace other historical forms of money (that boast intrinsic value.) This is a grave mistake and will ultimately drive the global economy perhaps one nation at a time at first back to a sound monetary standard, such as gold .

Gold has essentially kept its value over decades and centuries of time. For example, one ounce of gold was worth about the cost of a very nice suit in the early 1900s, and the same holds true today. (Compare this to the U.S. dollar, which has lost about 95% of its purchasing power since the early 1900s.)

#2 Gold Has Intrinsic Value

Because gold exists in finite supplies (as opposed to fiat paper currency like the U.S. dollar), its value cannot be derived by a simply government edict or decree. Governments may try to manipulate the price of gold, but the breakdown of the Bretton Woods Agreement in 1971 proves otherwise. In contrast, modern paper currency has no intrinsic value. The only difference between a $100 bill and an old piece of worthless paper is that the government says that the $100 bill has value. But this value is not intrinsic, meaning that the $100 bill does not hold value in and of itself. Similar to an old piece of scrap paper, its only use is perhaps fire kindling. Government cannot perpetually confer value on mere pieces of paper and expect to have a sustainable economy and monetary system.

#3 I Do Not Trust the U.S. Federal Government

I do not trust the federal government or the monetary wizards at the Federal Reserve to protect my family from a hiccup in the global fiat currency system, let alone total economic disaster. By owning and holding physical gold, I am able to insure myself against Washingtons numerous inept policies.

Paper money is a modern experiment which is ultimately headed for a solid brick wall. There are already growing movements around the world to restore gold as money and to allow gold to once again play an integral role in national monetary policy. One such movement is the current Swiss Gold Initiative .

On November 20, 2014, Swiss voters will head to the polls to decide on a measure that would require the countrys central bank to hold 20% of its total assets in gold. If approved, the Swiss National Bank would have five years to meet the gold reserve requirement.

As you can imagine, the proposal has been controversial

The initiative was launched by the conservative Swiss Peoples Party and represents one of the strongest challenges to date of the current global central bank Ponzi scheme. After all, all central banks around the world today print money out of thin air. Todays fiat paper currencies are backed by nothing except government IOUs and promissory notes.

Finally, the people of Switzerland have said: Thats enough!

The Swiss currency has tanked in recent years after the Swiss National Bank tied the fate of the Swiss franc to the euro when, in September 2011, the central bank agreed to prop up the euro by not allowing the euro exchange rate to trade below 1.20 francs. Since these measures were implemented back in 2011, the central banks portfolio is composed of approximately 50% euros, while its total gold holdings have been cut in half and now represent just 7.5% of the SNBs total assets.

If the initiative is successful later this month, then the SNB will be required to sell off a large portion of its euro holdings to purchase gold (approximately 1,500 metric tons).

If should come as no surprise that nearly all the higher-ups in Switzerland, including the current federal government, are fervently against the initiative.

*** NOTE: Those who are interested in buying the Swiss franc should know that the currency has already been bid up, as it currently trades near a two-year high. Perhaps an alternative investing idea would be to short the currency in the event the initiative fails. ***

If the initiative passes, more nations should (and will) take note

Imposing strict fiscal constraints upon the growing network of global central banks through similar national referendums may be among the few solutions left to citizens who seek to stop exploding government debt levels. If the monetary madness that affects nations around the world is not stopped and course-corrected by the citizenry, its inevitable consequences will be severe inflation, followed by a sharp and contracted period of deflation.

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