American troops, on breaking into Iraqi homes and finding small piles of gold jewelry, assumed that this was evidence of criminal or black market activity. Only a really wealthy person would bother with so much gold, to their minds. They had no understanding of gold beyond an ostentatious display of social status. But, as our Iraqi blogger 'Riverbend' explains:
Iraqi people don’t own gold because they are either spectacularly wealthy, or they have recently been on a looting spree... Gold is a part of our culture and the roll it plays in ‘family savings’ has increased since 1990 when the Iraqi Dinar (which was $3) began fluctuating crazily. People began converting their money to gold- earrings, bracelets, necklaces- because the value of gold didn’t change. People pulled their money out of banks before the war, and bought gold instead. Women here call gold “zeeneh ou 7*azeeneh (khazeeneh)” which means, “ornaments and savings”. Gold can be shown off and worn, but in times of economical trouble, a few pieces can be sold to tide the family over.
. . .
My aunt went into a tirade against raids, troops, and looting, then calmed down and decided that she wouldn’t hide her gold tonight: her daughter and I would wear it. I stood there with my mouth hanging open- who is to stop anyone from taking it off of us? Was she crazy? No, she wasn’t crazy. We would wear the necklaces, tucking them in under our shirts and the rest would go into our pockets.
. . .
I told everyone that we looked like maids who were playing dress-up with the mistress’s jewelry… E. said we actually looked like gypsies ready to make off with the mistress’s jewelry. The ‘mistress’ called out that we could laugh all we wanted but since the jewelry was everything she had saved since 1965, we had better be careful.
Gold is valued as a store of wealth throughout the Middle East and in India, as well as in nations that have experienced hyperinflation (Germany, for instance). Because it's a longer-term store of wealth, it tends to stick around until there is an emergency. Riverbend's family had to sell gold in order to make a ransom payment to save a relative's life:
We spent the rest of the day rushing to sell gold, collect money and my uncle took a broken L. to the bank to empty the account- they've been saving up to build or buy a house. A.'s parents were soon at my uncle's house and we had a difficult time breaking the news to them. His mother cried and wanted to rush home for her few pieces of gold and his father sat, stunned, chain-smoking and trying to make sense of the situation.
These small gold trinkets were their insurance. Am I suggesting the US will turn into Baghdad? Obviously not. But the crime level in Argentina, following their currency crisis, was phenomenally high. Argentina, you recall, was once the 5th most prosperous nation on Earth. Thus the phrase "rich as an Argentine."
Here in the US, where television broadcasts the "Everything Is Normal" message, equivalent to Soma, the few investors who've heard about gold usually buy a bit of paper that claims to represent the actual thing. They say "Sure I own gold... I have X shares of the gold ETF," or perhaps they own gold certificates or gold futures or some other paper instrument. This is truly ironic. You need gold when there's a disaster. Your quarterly statement showing your gold shares isn't going to mean squat during a disaster. Can you trade that statement for groceries, gasoline, or to pay a bribe?
But even if we disregard the importance of gold (and silver) during catastrophes, we still have the very important point that all these paper peddlers have not got the gold they say they have.
Not only do the ETF's not have the gold, and not only does the Comex not have the gold they claim, and not only is the Canadian mint missing $20+ million in gold, but probably Fort Knox doesn't have the gold it says it has, either. Or-- as GATA asked in a recent piece--
Who really owns that gold? And how many people have claims to it?
. . .
And of course the gold purportedly kept by the U.S. government at both Fort Knox and the depository in West Point, New York, is never seen at all and never publicly audited. For all that is known... on Mondays an assistant secretary of the treasury may take the German ambassador to Fort Knox and show him around and say, "Take a look at your gold," and on Tuesdays the assistant treasury secretary may take the French ambassador to Fort Knox and show him around and say, "Take a look at your gold." Wednesdays may be reserved for the Swiss ambassador, Thursday for the Italian ambassador, and Friday for the British ambassador, who is almost surely in on the joke and just making a social call.
If you're going to buy gold or silver, find a local coin shop and go and buy government minted bullion coins (or old silver coins, known as junk silver). Do not buy paper promises with some loose affiliation to actual metal sitting in some vault, ostensibly. Some may want to own gold and/or silver overseas, in which case the (audited!) GoldMoney is a good vehicle, but first get the kind of metal you can drop on your foot, as they say.
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