(Mike Maharrey, Money Metals News Service) The gold bugs are right. Gold is an important asset that everybody should hold.
And yet, the mainstream looks at these so-called gold bugs with derision.
Let me tell you in an illustrative story.
I almost didn’t get into reporting and writing about precious metals because I was worried about being labeled a “gold bug.” I didn’t want people to think I was some kind of weirdo.
I had done a little bit of freelance work relating to the gold and silver markets in the past, but when a precious metals company approached me and offered the opportunity to handle their website content, I was reticent. I thought, ‘If I do this, there’s going to be a certain perception of me that I don’t want to generate.’
Looking back, it seems kind of silly. Or maybe immature is a better word. My mom always told me I shouldn’t worry about what other people think if I’m doing the right thing. But here I was – worrying.
You see, I had been exposed to a lot of the mainstream reporting on gold. I’d heard it called a “barbaric relic” and a “useless metal.” I’d learned in history that the gold standard caused busts and bank runs. While I had some sense that mainstream narratives were often false, I was still indoctrinated enough to believe in the power of the good ol’ dollar. And I had been exposed to prepper circles. They loved gold, but I’m not gonna lie, some of those folks were – eccentric.
I finally decided I would high-ball my salary requirements and hope they rejected them so I could move on with my life.
They didn’t.
And here we are, well over a decade later. I’m a gold bug. And I’ll wear that label proudly.
Because, at the end of the day, I’d rather be right than popular.
Nevertheless, negative perceptions of gold dominate the mainstream landscape. If you watch the financial networks closely, you’ll find they are generally badmouthing gold as an investment or simply ignoring it.
With gold at record highs right now and a bull run that has driven the yellow metal up 34 percent this year alone, it’s hard to badmouth it. So, they are opting to ignore it as much as they can.
I’ll give you an example. On Tuesday, when gold was blowing through its previous record high and running to $3,550, the CNBC X feed mentioned the metal exactly once – and that was in the context of a Bitcoin article.
This apathy towards gold is evident in the investment data as well.
While gold bar and coin demand increased by 11 percent globally through the first half of this year, year-on-year bar and coin demand in the U.S. plummeted by 53 percent. American investors bought a paltry 9 tonnes of gold coins and bars in Q2, the lowest quarterly total since 2019.
Keep in mind, gold touched $3,500 an ounce for the first time during Q2.
Meanwhile, in China, bar and coin demand grew by 44 percent year-on-year in H1. Chinese investors snapped up 115 tonnes of gold bars and coins in the second quarter alone. It was the strongest H1 for physical gold buying since 2013.
This reflects the general trend during the totality of this gold bull run. Emerging market central banks and investment in the East have dominated. European demand has picked up in recent months, but most Americans continue to wait – for who knows what.
Maybe there are a lot of people out there thinking, ‘Man, gold is doing pretty good. But I don’t want to be a gold bug, and the guy on Fox Business said gold is pretty useless.’
But why do we see this prevailing negativity about gold here in the U.S.? I mean, this is a country that was built on gold and silver. It is enshrined right in the Constitution.
I think some of it is cultural. Compare Americans’ attitudes about gold compared to people in India.
Indians have a veritable love affair with gold. The metal is woven into the country’s religious and cultural life. Indians have traditionally held physical gold. They valued the yellow metal as a store of wealth, especially in poorer rural regions. Many Indians use gold jewelry not only as an adornment but to preserve their wealth. Overall, 87 percent of Indian households own some gold. Even households at the lowest income levels in India hold some of the yellow metal.
This attitude is prevalent in many Asian countries.
But I think there is more to American negativity about gold than cultural differences. I think the political class and their support system in corporate media and academia intentionally downplay gold because they need you to love their fiat dollars.
I sounded like a gold bug right there, didn’t I?
But it’s true.
Why did the U.S. abandon the gold standard to begin with?
Because it was limiting money creation. Franklin D. Roosevelt wanted the government to spend more. That required money creation. The gold standard blocked that.
By untethering dollars from gold, the government can create money at will. The simple fact of the matter is that if our monetary system were still constrained by gold, government would be smaller, less powerful, and less involved in – everything.
You will often hear me say the Federal Reserve is the engine that drives the biggest, most powerful government in the world. If it weren’t for the Fed’s monetary machinations and its ability to create money out of thin air, we wouldn’t have the welfare/warfare state that exists today.
Sound money restrains government.
If you believe government should have limits, you should be a gold bug.
On the other side of the coin, unsound money steals your wealth. Rep. Thomas Massie hit the nail on the head in this Labor Day quote:
“As we celebrate Labor Day, consider your wages are given in U.S. dollars. Money is a store of labor, and the U.S. government has been robbing you of it since 1913.”
Obviously, the powers that be don’t want you to understand any of this. They want you to have full faith in their paper money. They want you to think inflation is caused by greedy corporations, or Putin’s price hikes, or magic ferries, not by government malfeasance. They don’t want you to care about sound money because, quite frankly, fiat gives them control over you.
So, the downplay and ignore gold. They laud the actions of the Fed, claiming the central bank keeps the economy stable. They make fun of “gold bugs.”
But the gold bugs are right.
And I’m happy to be one!
Mike Maharrey is a journalist and market analyst for Money Metals with over a decade of experience in precious metals. He holds a BS in accounting from the University of Kentucky and a BA in journalism from the University of South Florida.
