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Dear Fellow Gold Bug

By: Richard Johnsson | Tuesday, December 25, 2012

You and I probably read many of the same newsletters and websites. In the context of the general public but also the financial community, I believe you could be considered a gold expert. I salute your foresight in seeing the financial crisis coming and your prudence in acting on it by stacking up gold as insurance well in advance. Well done!

Since you're an expert, what if someone wanted to ask you about investing in gold or about the recent peak in gold price, what would you answer? We surely know the standard answers of the mainstream media.

But to us gold bugs, those questions are simply wrongly put. We believe gold is money. We believe there's no such thing as perfect money, but still believe gold is far, far better money than the current monopolist fiat money we are all forced to use today. So to us, to own gold is to hold cash. The alleged peak in gold is just a new bottom in the fiat currency, be it USD, Euros or whatever they are called.

No, we are thinking about better questions. How long should I stay invested in this or that fiat currency? Will there be a new fiat bottom soon? What other investments are worthwhile right now in terms of gold? And so on?

Since our mindset is that gold is money, this helps us to better fend off the next silly moves by central banks and governments. We have a means for enhancing our chances at protecting ourselves from the volatility, inflation, deflation or whatever is ahead. We might even stand a better chance at actually benefitting from all the crazy turbulence around us, because we have a golden perspective on things that the fiat crowd doesn't.

And we don't really have to own any gold to do this. We only have to act on the belief that gold is money and use it as our premier unit-of-account. But by owning physical gold (and silver) we are also likely both feeling and being safer if things turn really ugly.

So we can answer such layman questions by telling them that we don't invest in gold since gold is cash. We don't believe gold has peaked, but that the dollar has hit yet another bottom.

That's the perspective of a real gold bug.


Author: Richard Johnsson

Richard Johnsson, Ph.D.

Richard C.B. Johnsson, Ph.D., works as a wealth manager in Bangkok, assisting expatriates and international investors living in Thailand with wealth management, estate planning and UK pension transfers (qrops). Visit his professional LinkedIn profile, his Expat Investor Thailand group on LinkedIn, follow him on twitter or visit his personal website. Contact him at

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