Traded Worthless Items for Real-World Goods

When Spain, Portugal, Britain, Holland explored the Northern and Southern Americas they brought items to trade with the indigenous Indians. They traded interesting but essentially worthless trinkets for Gold, Silver, Cocoa, Opium, Coffee Beans etc. The West traded worthless items for Real-World Goods. It took a while, but eventually the Indians woke up to the reality that they were trading valuables for trinkets and refused to trade…and so they were conquered, by ‘Conquistadors’, who enslaved and set to work the Indians, and set up shipping networks to ferry real world goods (wealth) back to Europe for the Royalty and Aristocracy of Europe.

It pays to keep this historical event in mind while reading the following….

Up until the 1950’s just about everyone in the western population owned at least a meaningful portion of their wealth in Gold, Silver and/or Diamonds, as tangible assets. Now, less than 0.1% (my assumption) own any at all, other than what’s found in jewellery, most of which is just diluted rubbish or simply fake.

ZH: “the net worth of the US consumer, declined from $63 trillion to $62.7 trillion….only $24.2 trillion are tangible: i.e., real estate and durable goods. The remainder, $51.9 trillion or 68.2% are Financial assets”.

We have drifted from gold & silver, to paper money savings, to superannuation (legalized laundering of your and your employer’s money), to [debt laden] real estate, to shares & equities derived from rises in equity (fake wealth) of property value gains….and now we find ourselves with about 30% hard assets and 70% fake-funny-money. The hard assets are either depreciating (cars, boats etc) or cheaply made property which is subject to market/economic fluctuations; and what goes up must come down. Everything is getting made more cheaply yet we are paying more for the non-privilege.

Has anyone actually saved money the old fashioned way and bought hard assets, in the last 20 years?….very few people I’m guessing. And since nobody has the will to save anymore, this is not a trend, it is an epidemic, a sickness, and nobody, and I really do mean nobody, sees the folly in it.

Most importantly, somehow, we have traded-away all that Gold & Silver in exchange for funny money, paper certificates claiming ownership of something intangible and more than likely with a counter-party (or 20), cheaply made tangible assets which need replacing regularly, and a population of zombies completely and utterly addicted to trinkets (iPhones, GalaxyS, iPad, Play Stations, X-Boxes, Facebook, Twitter {for Twits}, Farmville etc)…where did all the real wealth go, and who has it…who are the modern world Conquistadors who have swindled us?

You can call me crazy if you like, but I believe we are living inside a bubble within a bubble. A delusional psycho-financial sickness bubble, within a speculative financial bubble, within a Fiat bubble.

The remedy for cure is very simple. Forget your debts, just keep your head above the water-line. Whatever you have left each month, just buy Physical Gold and hoard it…whatever its cost, it doesn’t matter. Because a day will come when the pendulum of the public mindset will swing the other way, the mania will fixate on physical (PMs), nobody will be selling, and you’ll be light years ahead of the curve.