Great conversation with my friend Jay Taylor
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Probably simply wishful thinking.
But don’t you think that gold, etc is appreciated much more “over there”
I personally do because of the way I was brought up so many years ago!
Hard assets truly had meaning!
Absolutely Al. There is no question that precious metals are a status symbol where I live. But if I took the average man off the street and showed him you could make double digit gains on the markets in brief periods of time they would dump it all into speculation in a heartbeat.
In fact, I have shown a few friends here about strategies of buying and selling metals with leverage online. Most were stunned at what they saw and had no idea of the wide world of markets we all take for granted. They cannot participate though and cannot open broker accounts. The vast majority do not have credit cards or even lines of credit.
What I mean is that buying gold and silver are one of the few options they have besides opening a business or speculating on real estate and other hard assets. They are in an investment straightjacket.
Look Al….these people are the same as you and I. If they had the option to participate in US and European equity markets, buy and sell ETF’s, play futures and currencies etcetera then they would dump their metals in a heartbeat.
They are not smarter for owning PM’s….they are just disadvantaged.
By the way, I am not knocking Jay. He has been one of my favorite guys to listen to for the past years and I rarely miss his shows. My criticism is this idea that poor people are smarter because they hold metals as if they have some kind of superior sense of markets. That is totally wrong. They are impoverished BECAUSE they hold to the old ideas. The thing is that most rural people here are still on a barter economy that stretches back to before the times of Christ. There has been no advances in financial technologies for farm people in Kenya in over two thousand years. In other words, no progress. And guess what? They are still dirt poor except in land, cattle, agricultural business and proto-assets like precious metals. But they don’t fly. They are disconnected from most forms of modern finance and they have just about zero access unless they have lived abroad and learned. So while the systems they have work just as they always did they remain poor by almost every standard we use to measure wealth and they live without access to capital pools, leveraged funds, pensions, social safety nets and credit. Maybe Jay will come to Africa and see it with his own eyes and reconsider just how great it is to only have silver as your retirement fund.
I understand.
A side note.
The commentary/topic about Turkey paying for Iran’s hydrocarbon w. gold is OLD (i.e. nothing new here)
It’s been AT LEAST 2 yrs that this way of payment has been “occurring on and off”.
This is why there was so much gold imports in Turkey in 2013, and why some US gvt agencies raised the issue as they considered this was a way for Iran to circumvent the embargo in place around the country on many products.
There were articles “back in the days” on Zerohedge, explaining how the gold for hydrocarbons payments were being done, detailing how, specifically, some locations/cities in the middle-east were used to “facilitate” the trade.
Best to all and GL investing/trading.
LPG
I realize that LPG.
The article; however, about India was from the last couple of days.
Best to you,
Big Al
Good points LPG about the ongoing saga of Gold for Hyrdocarbons. The Middle East and the world has been looking for opportunities to break away from the Petro Dollar for a while. In the last 2 years we seen the groundwork layed for a change in the way things have been done.
Great interview Al & Jay. I liked many of the points that were raised in this editorial.
Here is a good article from Avi Gilburt from last Wednesday:
When gold is buried by past societies and is discovered by modern technology the emphasis is only on the fact that we have unearthed an asset that past generations wanted to hide because it had value and meaning so they or their descendants could retrieve it at a future date. Unlike fiat currency if you place some paper money in the ground and it survives even ten years it will not only lose value but disintegrate over 100 years it will become worthless. If they can’t replicate something, buy it, hold it, and keep it, because it will always be valuable. All societies from the beginning have realized this one truth about life and value.
Good points DT. I’ve been saying for a while if you went to a deserted Island and dug up a treasure chest: Would you rather have it full of Gold & Silver, or a bunch of 400-600 year old paper fiat currency? Hard assets will transcend time, whereas the coin of the realm…..not so much.
Probably not the currency!
Agreed. I’ll take the gold or Silver treasure chest and rebury it for years to come 🙂
OK, you got me there. I would take the gold over the paper too in that scenario. Now if only I could live for three or four hundred years to extract the comparative benefits and make that hypothetical situation a reality.
Alas, I live in this period and need to be practical. Paper still rules while we live and breathe. If I only saved for my descendants benefit some generations distant from me then its would be a different story.
This is what I’ve been saying ” is going to happen ”
http://www.zerohedge.com/news/2015-04-12/gold-backed-sdr-quite-likely-happen-lses-lord-desai-warns
I will link the ZeroHedge article that is the basis of this show if that’s OK, Al.
Gold Jumps After India Reveals Import Surge — Zerohedge
http://www.zerohedge.com/news/2015-04-10/gold-jumps-after-india-reveals-import-surge
Jay, you talked about societies that have not been indoctrinated into the Western belief systems and suggested that those people in less developed nations understood honest money better.
To some extent that is true. But only because they live closer to the ground.
I would add that some of these poorer countries really don’t have other good investment and wealth retention options available to them so naturally they adhere to time tested models of wealth accumulation.
Gold and silver are indeed seen as valuable where I live in East Africa. But you know what else….most would prefer to invest in a vehicle or small business before sinking their income into gold or silver because the returns are just so much better.
I don’t think we can generalize and suggest that less developed countries somehow have the inside track on understanding savings methods better than everyone else.
For example, they suffer serious educational deficits here where finance is concerned and little is known or understood about how the world functions outside their own borders.
That, combined with a poorly developed financial sector and little access to international markets means the vast majority have no understanding or access to the kinds of investment strategies most of us take for granted in the US, Europe or Canada.
So the argument that countries like India or any other poorly developed nation is somehow superior to the West because they still adhere to primitive barter economies and savings held in metals is not quite accurate when you consider the low level of development in their banking and finance areas nor the level of opportunity afforded the average working person.
And don’t forget,.. income matters. India, especially the rural areas are still quite poor compared to the West. Same with rural China and much of Africa where the bottom billion population incomes are seen.