Gold and Silver Cannot Evaporate - But Accounts Receivable Can!

Way back in 1999, Alan Greenspan told the United States Congress, “Gold is always accepted and is the ultimate means of payment and is perceived to be an element of stability in the currency and in the ultimate value of the currency and that historically has always been the reason why governments hold gold.”

It’s rather a long sentence, but well worth re-reading. Especially if you are concerned about protecting and hedging your assets against inflation. After all, traditional offshore asset protection strategies tend to focus on hiding your money in an offshore bank account, with the aim of making sure your ex spouse or creditors don’t get at your assets. That’s all very well as far as it goes – but by gradually devaluing fiat currencies like the dollar, the government is taking your money through the ultimate ‘stealth tax.’ Because your assets should not just be counted in dollars or pounds or euros. They should be counted in what you can actually buy with those dollars, pounds and euros! And in this regard, gold is the perfect hedge against inflation.

Now, getting back to Alan Greenspan’s words, here’s my thought for the day. Water’s boiling point is about 100°C or 212 °F.   Gold’s boiling point is 2,856 °C or 5,173 °F.  Silver’s boiling point is 2,162 °C or 3,924 °F.  Gold is also extremely resistant to corrosion and can sit at the bottom of the corrosive ocean for centuries and still retain its luster. (That’s why it’s fun to go diving underwater for sunken pirate treasure ships!)

In other words, physical gold like coins and bullion bars cannot evaporate or disappear when used as a currency in ordinary daily transactions, nor when hoarded safely in offshore bank vaults.  At all times and in all circumstances gold remains money. It is the ultimate store of value.

Obligations – or accounts receivable – can, however, evaporate. We’ve seen that happen so many times recently. Starting with securitized sub-prime mortgages, then with giant failed investment schemes, or maybe General Motors bonds – not to mention iniquitous civil asset forfeiture orders against bank accounts of persons who have never been accused of any crime.

Bear this in mind when you consider how to invest in gold. Do you want “accounts receivable” denominated in gold like ETFs or other methods of holding gold in brokerage accounts? Or do you want real, physical gold and silver bullion investments? It’s up to you!

Source by Peter Macfarlane

Gold and Silver Cannot Evaporate - But Accounts Receivable Can!