Gold vs. $$$$$ … Greed vs. Causation

By: Ken Hughes

Just how safe is gold and how practical is owning it? This is just a novas’ opinion but I have some questions those persons promoting the purchase of gold aren’t answering. In my city every jewelry store, pawn shop and tattoo parlor is offering to purchase unwanted gold jewelry or any items up to and including the gold from grandpa’s teeth. Having had some limited experience in dealing in gold I know the average person doesn’t have the slightest knowledge of what it take to value items made of gold. Jewelry for an example can range from 24 karat to gold filling over base metals. 24 karat is the purest form of gold and seldom used in making products, gold filling or gold wash is useless as an investment. There is no way of looking at gold with the necked eye and accurately being able to judge the purity of the item. Most dealers touting their expertise in gold are blowing smoke, they’re not necessarily dishonest their guessing at best.

Fine jewelry as opposed to costume jewelry ranges from 22 karat to as low in purity as 5 karat, most jewelry sold to the public is 14 karate, custom creations are most times 18 karat and can go as high as 22 karat. Gold isn’t traded by the gram that’s a creation of T V hucksters it’s traded by the troy ounce. This means when you put your old jewelry on your Weight Watchers scale what you see is meaningless, if its 14 karat the weight will be slightly more than half in pure gold. The next hurtle is the dealer your selling to is entitled to make a profit off the deal, how much profit is something you need to negotiate with the dealer.

In most families old heirlooms become less important as time goes by. If you’re selling great grandmas favorite broche and your relying on family history to establish its rarity don’t. Most of those family fables are just that fables, without written documentation those stories are worthless. Sentiment has no value in trading and selling gold. If someone had a gold nugget Jesus held in his hand without proof it would only be worth today’s gold price. The price of gold is based on today’s fear of dollar devaluation and the stock market crashing, should either of these things happen the price of gold will go down with them.

There’s more to fear than being ripped of by unscrupulous gold dealers. Should the dollar become worthless how would anyone be able to use gold as money? Someone would have to establish the value of an ounce of gold that or everyone would be negotiating their own prices and that isn’t a practical solution. Every country in the world has become accustomed to their government printing money and establishing its value this is why the dollar will never become worthless.

There’s that other thing that sits there in the shadows, in 1933 President Franklyn Roosevelt issued an executive order prohibiting the public from owning more than $ 200.00 in gold items, it took over a quarter of a century to lift the ban on the public owning gold. Frankly I don’t see that much difference between FDR policies and those of Barrack Obama as his tax policies are questioned by the new congress he may only have gold to fall back on.

I’m not suggesting every dealer is trying to rip their customers off what I’m suggesting is the lack of expertise by most of those gold dealers may make the public a victim more than a beneficiary. This frenzy to invest in gold over other more conventional forms of investment has its drawbacks as well as the potential advantages. What’s likely to happen is the public has exchanged one bogyman for another more devastating bogyman.

The best hedge against being disappointed is doing some research on the internet, both sides both pro and con are available by using very little effort logging on to Google or Yahoo.


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