Gold is Money, and Nothing Else

Gold is Money. Its been said before, notably by the late JP Morgan. Yet today we find ourselves forgetting that gold is money.

Jim Sinclair has made some very accurate calls in his time, and is one of the most recognized experts in gold today. A recent message from Mr. Sinclair, I have bolded where he says gold is money:

As far as I am concerned:

  1. I do not anticipate a one month or more drop in gold. Neither does Monty Guild, so be careful not to read his general commodity comment ass-backwards.
  2. The worst case scenario is a chop after the low of April 28th set in, and the rally high in the low $950s. Following this the chop gives way to a break above $1034 on its way to $1200 in 2008. Write that down for the dark night of your gold soul.
  3. Gold is a currency, not a commodity.
  4. Gold while remaining as a currency is now more tied to the euro than the USDX.
  5. Weakness in crude, if you can call any price above $100 a barrel weak, helped gold be prone to lower prices.
  6. Gold?s real help moving lower was a push by COT that triggered the mindless black boxes which are as nuts on the upside as they are on the downside.
  7. If tonight you curse gold, keep this in mind when it crosses$1034, and please leave never to return.
  8. Hold my hand when you feel low as gold takes a beating, and when you feel high as a kite when higher highs happen. I will moderate both for you.
  9. The greatest technical analysis trick is simple to learn. Whatever your emotions say to you is totally wrong. Whenever you want to margin to the rafters it is time to eliminate debt.


Modern economic alchemy has labeled gold nothing more than a commodity, a bygone relic, with no industrial or commercial use in todays world of paper and electronic markets.

But what happens when those who are in charge of those paper and electronic systems abuse it? What happens when people lose confidence in it? What happens when the paper becomes ever more worthless in the eyes of the world?

Quite simply, a return to gold is money. It has been money for over 5000 years. Human beings have this interesting tendancy to forget history, and what we have learned from societies past.

Economies, and nations, both regional and global have gone back and forth from ‘easy money’ to ‘disciplined money’ in a recurring pattern that so far has shown no reason of stopping.

Governments of course favor easy money, because they can print as much as they like, and spend as much as they like, with no sensible restraints on wars, emergency relief, subsidies on foolish programs, and social welfare that dwarfs the entire global gdp combined.

The bad part of course, is this propensity to print and create tens of trillions of dollars out of thin air is called inflation, and it is spreading around the globe like a cancer. Food riots, oil heading to $200 a barrel, $5.00 a gallon gas, and the sad part is, this is just the beginning.

There are, however, solutions. Investigate gold and silver. Learn why gold is money. Most importantly, learn why the cycle is again shifting back to gold is money, and what it means in terms of how high gold will truly go.

Do your research, because for the ones who bury their heads in the sand and fail to see it coming, there will be terrible losses as stock markets come down from baby boomers sucking their money out as they retire in hordes.

Some however, will be gathering wealth because they were smart enough to learn from history.