More Frequently Asked Questions About Gold and Silver Investing

January 12th, 2022 Comments

We get lots of questions from the public about precious metals.

Question / Answer

Some people are curious about the basics. Others are skeptical about the case for owning gold and silver. Still, others are longtime customers who have highly specialized inquiries.

Here we will answer a few of the most common, most broadly relevant questions we get…

QUESTION: Is inflation being underreported?

ANSWER: Bureau of Labor Statistics officials recently trotted out a new inflation-reporting gimmick. They will again adjust the formula for measuring Consumer Price Inflation (CPI) as part of an ongoing effort to mask the full extent of currency debasement.

The two-sentence announcement simply states the index will use consumer expenditure data from 2019-2020. There isn’t enough detail to know exactly what this means, but it looks like an effort to raise the baseline numbers and thereby moderate reported price increases.

Americans will know for sure the fix is in when the headline CPI numbers begin to decline and the financial press starts cheering Biden and the Fed for conquering the inflation dragon.

It is just the solution Americans should expect given the times. Bureaucrats will do nothing to shore up the Federal Reserve Note “dollar.” They will rely instead on phony statistics and a coordinated PR campaign.

QUESTION: I’m concerned the Biden administration will go after IRAs and cryptocurrencies. Will confiscating gold and silver coins be next?

ANSWER: It’s highly unlikely, in our view. While we don’t doubt that some officials within the Biden administration seek the power to seize investor wealth on a large scale, the most radical elements of the Biden agenda are being thwarted.

For example, Joe Biden’s attempt to install a Marxist to oversee the banking system failed after moderates in the U.S. Senate objected. And for the same reason, his “Build Back Better” agenda has been both scaled down and then outright blocked.

Confiscating precious metals wouldn’t be of much practical or strategic value for the administration, anyway.

Gold and silver represent about 0.5% of all liquid investment wealth.

And since the government has no intention of making the Federal Reserve Note “dollar” redeemable in precious metals again, it has no overriding need to acquire them.

Back during the Great Depression, the government ordered Americans to turn in their gold for payment in cash. The Federal Reserve and the U.S. Treasury needed gold to expand the currency supply. The government then devalued the dollar by raising the gold price.

Today, of course, the Fed can expand the currency supply at will. Therefore, the bigger threat to investors is the confiscation of our fiat currency’s purchasing power through inflation.

Meanwhile, it would be far easier to seize assets sitting in financial accounts connected to the banking system – or most likely, though higher tax rates or changes to retirement account rules, such as requirements that such accounts buy government bonds, etc.