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Tuesday, April 24, 2012

How to buy gold

Most people still don't get gold at all.  That's fine.

But let's just say you get it.  You get that gold is not an investment.  You get that gold is not a trade.  You get that gold is Money.  It has always been money.  It was money long before the dollar had been conceived.  It will be money when the dollar is a distant fading memory.  (which may be soon.)

And you get that the Value of gold as money is increasing every second, just as the value of the dollar is decreasing every second (Irrespective of meaningless metrics like the "dollar index" etc.)

Not everyone gets that.  But let's say you do.  But it only just dawned on you recently and now you wonder: What to do about it?

Step one.  Buy real gold.  Buy bullion.  Buy gold coins from central government mints.  Buy steadily, and store it in a safety deposit box or a safe.  Buy from huge volume dealers. Call up your local comex repository like MTB, or go online to a retail giant like Apmex.  I get nothing for recommending these sellers.

Step two.  Stay away from paper gold.  Gold stocks are paper.  They may represent ounces in the ground, but they are not ounces in the ground.  Futures are paper.  They do not settle.  They are a trading vehicle only.  Tracking stocks like GLD are stocks.  They are liquid - right now.  But it's not possible to know if they hold gold in their vaults.  And even if they do, it's not your gold.

Step three.  If and only if you have a very strong knowledge of world history: buy rare numismatic gold artThis does not include US gold.  That market is mature, because many Americans do know US history and have bout the hell out of that market.  But if you know European, Medieval, Byzantine, Ancient History, you can understand which gold coins are of immense historical value, and you can find them at auction or on line.  They constitute GOLD ART and they are very very cheap compared to all other forms of art.

Step four: Do not worry or even monitor the Paper Price of Gold as regulated buy the highly manipulated futures market.  It is irrelevant since you are not trading gold.  Do not pay any attention to "Historical Metrics" and "ratios."  The gold-silver ratio, the gold to SP ratio, the gold-gold stock ratio, the gold-anything ratio is meaningless.

Addendum: If you do not "Get Gold" but are wondering about it: study hard.  Do you own work.  Read the history of the world economy.  Read the history of money.  Because if you are borrowing investment ideas from others you will be the proverbial "weak hands" that buy at the top and bail out at the bottom.


  1. Investing in paper gold is the wise way to yield desired profit instead of going for ornamental gold. Paper gold and e-gold are the upcoming investment options to make easy profit from markets.

  2. If you believe the world economy is basically healthy and you're simply protecting yourself from inflation - then, sure, buy paper gold. If you believe a crisis in confidence is imminent -then paper gold will not help you.