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Simon Brown is out with another gold hating tweet. A perma-gold bear, he tweeted today in an attempt to bash the gold bugs again.
Someone please tell Simon that the Rand price of gold is up 47% since he wrote this comment on humanaction.co.za in December 2010. The equity bugs’ favourite, the JSE All Share Index, is up only 3.2% since then. Talk about underperformance.
Is gold really a currency ?? http://awe.sm/5y0An
Then he links to a video clip of Reuters blogger Felix Salmon going around the streets of NY with a gold gram worth $52 to buy goods from retailers to see whether gold passes the ‘currency test’. Because Felix is denied on several occasions by retailers who refuse to accept gold as payment for goods, his conclusion is gold is worse currency than dollars.
Of course, legal tender laws rule out the use of gold as currency in the American economy. Because we can’t use dollars as payment for goods in South Africa, does that mean dollars aren’t money? Perhaps Felix should try using renminbi or Rands as a means of payment in NY. When he gets denied, would it mean renminbi or Rands aren’t money? Of course not. It would only mean they’re not currency in the US.
Legal tender laws mean dollars are currency, the common medium of exchange, in the US.
Then, I wonder how these two gold-bears would explain why the British Sovereign gold coins have been part of the US Special Forces “survival pack” for years now? They have been nicknamed the “gold survival coin.” Why would useless currencies be given to special forces as part of their survival pack?
Perhaps Felix should try going to 1) Malaysia (Kelantan province) and try this ‘trick’ there, where they recently introduced the gold dinar as currency. Gold is money and currency there. Otherwise, he should go to 2) a drug dealer on the streets of NY and see whether they accept gold as a currency. The free market in the US has resorted to Tide laundry detergent as currency to escape the fiscal police state. I can guarantee they will accept gold as currency.
I always find it interesting how the gold haters are full of tweets following a decent rally in the gold price. Like I said earlier, the gold price is up 47% in Rand terms in a year and a half, beating the roughly 5% dividend yielding and ‘wealth generating’ JSE All Share Index’ by 40 percentage points over 18 months.
Perhaps it is because they feel the need to justify to themselves/ their followers/ their investors why they have missed, and continue to miss, the biggest bull market in history.