In response to Dave Ramsey

So, a buddy of mine asked me what I thought about an audio clip that Dave Ramsey posted about gold.  Below is the response to my friend about the audio clip.  I ask you to please listen to the audio clip first, then follow up with reading my response.  I realize that my response kind of jumps around a bit, but I left it as I originally sent it to my friend.  Dave Ramsey audio clip found here (click the ‘Play’ button at the bottom to listen to his response, the typed response cuts out a lot of his answer):  Why Does Dave Diss Gold?

My response follows:

In my opinion, he rants about it but really never backs up WHY gold is a bad deal, bogus, or not a commodity.  A simple look at the history of the world backs the view that gold and silver ALWAYS triumphs as the exchange standard.  He says that gold is not REAL and that money is spiritual, however look at the faith that people have in the dollar now….declining sharply.  “Gold is only as good to you as someone’s willingness to take that in payment”, is also true of the dollar.  When the dollar is worth nothing, do you think they will take that as payment?? And that is not an ‘end times conspiracy’ belief, that is a fact backed up by the dollar being worth about .03 cents today.  97% of value has been eroded. His Katrina scenario was a temporary and localized NATURAL emergency….not a nation-wide FINANCIAL or CURRENCY crisis.  He says, “The idea to return to the gold standard after a crash is bogus”.  I guess history is wrong when it clearly shows that after EVERY fiat currency crash and during EVERY currency crisis people return to gold and silver.  He also says that buying gold is only speculating in precious metals, but I venture to argue that buying stocks or bonds is only speculating in paper.  He says gold has a 70 year track record of 4.2 percent, which is a little better than inflation.  That is exactly what gold and silver claims, “HEDGE AGAINST INFLATION”!!!!!!!  The dollar has  a 97 year track record of 97% LOSS!!!!!!!!!!!!!! Tell me Dave, how  is it that GOLD is a horrible investment??   He’s crazy to think that people won’t take gold in payment for something.  Dude, look at where people’s faith is going….the price of gold is rising and the dollar is falling.  Thats not to say that their won’t be ups and downs, but with things the way they are people’s faith is shifting and its shifting to where it has shifted throughout history…GOLD.  It reminds me of the Israelites in the Bible….they always strayed from the path but when things got bad they always came back to God, what worked, and what they truly believed in.

I also read his explanation of inflation (found here)….I don’t agree at all with his explanation.  He states that it is the rising of prices of goods. That is the elementary definition, because yes during inflation prices of goods do rise, but that is an effect of inflation….not inflation itself.  Inflation is the devaluation of money that in turn causes the rise in price of goods because there is more money out there chasing less goods to purchase.
I don’t doubt that he may be a good personal finance coach or have some great views on other aspects of finance…but I can tell you an economist he is not.  And I don’t mean to say that economists of today know much better….I follow Austrian Economics.  The majority of economists today are Keynesian Economists.  They are the ones that got us into this mess with the fiat money system.  John Keynes even stated about his own fiat currency system,  “By a continuous process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method, they not only confiscate, but they confiscate arbitrarily; and while the process impoverishes many, it actually enriches some“.
I think it is good to question EVERYTHING though….if you hear someone say gold and silver is bad, research why.  See if they EXPLAIN why.  He did not explain a single VALID reason it was bad.  Little rants like his actually strengthen my belief in precious metals because as much as I can tell he hates gold and silver he can’t say WHY.  He says things like it “sucks” its “dumb” and resorts to calling people who do believe in it names.  I’m not an “end of the world conspiracy theorist” but I do think this dollar will fall on its face and cease to exist. Every currency in the history of the world has done so.
That’s my take….I don’t claim to be some expert (i do read a lot of experts though) but I can tell you that I don’t believe he knows what he is talking about on this subject.  If he did know what he was talking about I think he would resort to facts, not name calling and ‘ranting’.

Please leave your comments, I’d like to know how others feel about gold and silver as an investment.

This entry was posted in Investment/Financial. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s