Calling All Austrian Economists!

Economics Economics Questions
1

Hi everyone,

I recently made a post expressing my problems with a decision that I am having to make about whether to join a wealth management firm or not. My friend who owns this firm is…not a huge endorser of gold, but has told me that he will give me two weeks to put together a presentation of some sort which would try to convince him.

Alright, well I already have the basic grasp and understanding of why gold is important, and why it has the role it does.

But this guy is going to want some SERIOUS evidence and, almost as importantly, some really nice ACADEMIC SOURCES!

So all of you Mises people…this is your chance to help me convince a non believer! :slight_smile: I am asking for your help, which would be of tremendous assistance to me as I appreciate the knowledge and ability to express such knowledge which so many of you posess.

Let’s get started with the basic question that I am going to have to pose in this presenation:

“Why should we, as wealth managers and financial advisors, advise our clients to put a portion of their portfolio into gold?”

OK, first off, I understand that gold is not the end all. It is not the answer to everything. Are there other things to invest in that would also protect you from weakening dollars? Yes. But we need to focus here.

Alright, so there’s the question which I will need to argue to my friend. I am going to need…

  1. Good, concise arguments

  2. Tons of both current and historic examples

  3. LOADS of academic research/papers/evidence which supports all of this.

  4. Literature which I can suggest he read in order to understand these issues in even greater depth.

I don’t pretend to be an expert of gold investing, but I do know that I am not absolutely crazy when I voice my support for a type money (gold) that cannot be printed into oblivion, manipulated for political and personal gain (at least not for very long), and is an ACTUAL store of wealth.

Alright…so that’s all I have to say right now. I’m going to need all the ammo you guys have available. My abilitiy to present this to him will determine one of the biggest choices I have ever had to make in my life. I’m sorry to sound melodramatic, but it’s true.

I really appreciate all of you who take the time to answer all of these questions. I know that it probably can feel redundant, but know that you are helping to do a good thing.

Thank you.

2

Edwin Vieira, Jr. - Forgotten role of constitution in monetary law; this details the history of metallic monetary standards in the legal system.

http://hiwaay.net/~becraft/VieraTexasLawReview.pdf

Case Against the FED; how banks inflate. These will have most of what you need to diminish confidence in paper money and bonds.
http://mises.org/books/fed.pdf

http://mises.org/books/whathasgovernmentdone.pdf

True Purpose of Glass Steagall:
http://mises.org/journals/qjae/pdf/qjae1_1_1.pdf

Interest, Yield curves, term structure of savings - This will demonstrate why firms invest the way they do with interest rate signals they get. It also explains why banks are doing what they are doing today. It is kind of ridiculous when you step back and think about it.
http://mises.org/journals/qjae/pdf/qjae13_3_5.pdf

Prices and Knowledge: Why central planning won’t work. Everything the government tries to do is doomed from the get go.
http://emilyskarbek.com/uploads/The_Use_of_Knowledge_in_Society_-_Hayek.pdf

3

Mises.org gold resources

Argumentation:Gold

In particular, I’m going to recommend

The Case for Gold

What Has Government Done to Our Money?

Understanding the Dollar Crisis

The Dollar Meltdown

The Real Crash (this doesn’t come out for another few weeks, but if you can get ahold of it in time and get him to read it, it may very well be the one thing you need.)

Boombustology

Tom Woods: resources on inflation

List of books on inflation

Literature on Practical Applications of Austrian Economics (I recommend referring to Schiff, Rogers, and Faber. There’s no way your friend is bigger than these guys.)

Meltdown (tons of great info, easy to follow explanations and examples. Short, easy read. Possibly the best introduction to Austrian economics.)

I’ll add more as I think of them.

4

JJ: The Human Bibliography

5

Is convincing him that gold is good investment or that gold should be money the determinant of joining his firm?

6

I think convincing him that gold is a good insurance policy is my main goal.

I don’t know if I will ever be able to convince him that gold is money, and in terms of gold as an investment…I don’t even personally really see it as an investment, since I don’t intend for the gold to appreciate in value; it merely retains the value.

7

JJ,

Thank you so much for this!

Now, while I go about reading all of this, anyone who is willing to spend the time providing some strong yet concise arguments would be prudent to do so within the next week :slight_smile:

I’m going to be busy reading and writing, but I am also going to need someone to play Devil’s Advocate with. I know I can count on you guys! :smiley:

8

Bingo. (although it’s possible for it to actually appreciate in value)

9

JJ,

Could you send some Academic Papers my way? I need to get into some of the nitty gritty as well.

Thank you!

10

Also, any fancy charts and graphs that you could find would be EXTREMELY helpful.

11

Fancy Charts, Anyone? :smiley:

12

I got a chart for ya right here (but I’m not going to tell you want to think of it) :

500×351 48.1 KB

13

Holy Frijoles…

I mean, I was asking for historical charts and the like…but WOW!..This blows my mind.

14

Jargon, by the way…

Any way we can confirm these sources? I don’t know anything about this SK Options company. I just don’t want to believe something before I can verify it.

15

http://www.zerohedge.com/news/overnight-longintraday-short-gold-fund-more-doubles-just-over-year-generates-43-annualized-retu

16

Unfortunately I’m not a finance whiz-kid and I can’t do much else other than point you to the article. It has more charts on the intraday short/ interday long pattern:

http://www.skoptionstrading.com/updates/2012/1/14/revisiting-our-proposal-for-an-overnight-gold-fund.html

17

Thanks JJ, I already read it.

Now I want to know whether these people and numbers are trustworthy.

18

Wow!

So my friend called me this morning and told me that he had finally come to the conclusion that it was indeed wise to have some precious metals in your portfolio!

I want to thank everyone here for helping me out and providing me with fast information in order to convince him with cold hard facts.

Cheers,

19

interesting. What exactly did you give/say to him?