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Black Box
Forecasts
"Six hours ahead
of its time"
by
Rick Ackerman
July 14, 2003
 Is Our Gold Safe?
I promised to share with you
some of the terrific letters I've received in response to my
query about whether we should be worried about restrictions on
gold ownership. The question was inspired by a reader who asked
whether it might be safer to own mining shares rather than physical
gold, which, as many of you will already know, was confiscated
in 1933 by order of President Roosevelt. Lest anyone think our
discussion is merely academic, and before we get to a letter
from a very wise old-timer who insists he is not a gold bug,
let's ponder Roosevelt's edict, in his own words:
"I, Franklin D. Roosevelt,
President of the United States of America, do declare that said
national emergency still continues to exist and pursuant to said
section to do hereby prohibit the hoarding gold coin, gold bullion,
and gold certificates within the continental United States by
individuals, partnerships, associations and corporations and
hereby prescribe the following regulations for carrying out the
purposes of the order:
"Section 1. For the purpose
of this regulation, the term 'hoarding' means the withdrawal
and withholding of gold coin, gold bullion, and gold certificates
from the recognized and customary channels of trade. The term
'person' means any individual, partnership, association or corporation.
"Surrender Your Gold"
"Section 2. All persons
are hereby required to deliver on or before May 1, 1933, to a
Federal Reserve bank or a branch or agency thereof or to any
member bank of the Federal Reserve System all gold coin, gold
bullion, and gold certificates now owned by them or coming into
their ownership on or before April 28, 1933, except the following:
"(a) Such amount of gold
as may be required for legitimate and customary use in industry,
profession or art within a reasonable time, including gold prior
to refining and stocks of gold in reasonable amounts for the
usual trade requirements of owners mining and refining such gold.
"(b) Gold coin and gold
certificates in an amount not exceeding in the aggregate $100.00
belonging to any one person; and gold coins having recognized
special value to collectors of rare and unusual coins.
"(c) Gold coin and bullion
earmarked or held in trust for a recognized foreign government
or foreign central bank or the Bank for International Settlements.
"(d) Gold coin and bullion
licensed for the other proper transactions (not involving hoarding)
including gold coin and gold bullion imported for the re-export
or held pending action on applications for export license."
There was more to it, but you
get the gist. And let's admit it: You were somewhat surprised
to learn how overweening the U.S. government had been in its
demands -- perhaps even shocked to realize that such demands
could have become law in America. But they did, with the result
that some citizens will never again trust the government to protect
economic liberty in times of severe crisis. Which brings us to
this letter, from an old-timer whose distrust runs deep:
A Survivor Remembers
I am not a Gold Bug [as you
have suggested]. I lived through three Wars -- WW II, Korea and
the Cold War -- which was hot for me. I learned my lesson in
1941. I wanted to buy a Winchester 94 to go deer hunting. My
father had me buy a Defense Bond instead, [but by the time I
cashed in the bond after the war, the price of the gun had jumped
from $37.50 to $79.95]. An ounce of Gold will not buy such a
gun today.
"You are not going to
survive hiding behind sacks of Gold coin. There is more to it
than. It is too heavy to lug anywhere to survive. A Gold bug
invests in Gold to grow in an economy, and it is not an investment
if you do not own 25,000 ounces of Gold. [321gold comment: whaaaat? That's US$8.6
million-worth] It is not
a store of value. There is always the hope you can convert your
Gold to money. But money supports Gold, Gold does not support
money. When money ceases to support Gold you have eventual chaos.
A Gold standard is an easy thing to create. The Government outrageously
overprices Gold so only a fool will turn his paper money into
Gold. You cannot have "free Gold," as modern technology
has made Gold cheaper but not in relation to population. You
never know when they'll be able to take Gold off the Pacific
Ocean floor, or out of seawater, or out of the granite of the
Smokie Mountains. The Government controls the price of Gold by
its usury. In 1928 you gave the Government $110 worth of Gold
and they gave you $100 in coin.
Buy Gun First, Then Gold
"Before I would buy an
ounce of Gold I would buy a .308-caliber M-14 with a goodly number
of clips and Teflon Coated FMJ ammo and a prayer book. It is
nice of you to give your children Gold coins, but they had best
not live in a city and be static, since you cannot move a significant
amount of Gold from place to place. I do not think you know what
Gold weighs, but bread weighs more. [321gold comment: For those readers
who have never held any gold in their hands, IMO weight is never
an issue. Heck, you can stuff 12 Harmony ten tola gold bars (US$15,000-worth)
in a Winston's cigarette packet; weight: nearly 42 oz/tr.] As far as Gold stocks are concerned
my [Goldcorp shares] cannot be sold in a day or a week. I have
more shares than were traded so far this week. There are 158
million outstanding and options and all that other bull___t.
There is more to War than Hollywood, and more to survival and
investment survival than I have ready anywhere. A gun is important
but not as important as a bayonet with some guts behind it. God
help your readers when they throw the light switch and the lights
do not come on.
"As far as investing in
stocks or bonds, go to a casino that has electronic blackjack
or a [multi-deck] boot. I am sorry, but I have been there and
done that. I have more holes in me than Swiss cheese. So far
I have been burying my friends and I have at the most a few years;
but I have my Zippo. Michael D."
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Rick Ackerman
Copyright
© 2003 Market Wise
reprinted at 321gold Inc
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