Bullion is not an investment. Gold and silver are not just commodities; they are monetary metals. Bullion, in other words, is money. But unlike currencies, gold and silver bullion is money that cannot be created out of thin air by central banks. In other words, holding bullion is like holding cash. But, unlike paper money or cash investments, cash bullion is an asset which is nobody else’s liability.
J.P. Morgan himself said it best when he was asked by a US Congressional committee in 1912 what was the role of gold. He said: “Gold is money. Everything else is credit.” How times have changed in the last 100 years, as most people now seem to have forgotten or are unaware that gold is money. Yet, gold is becoming a trade settlement currency again for some nations and even seems to be evolving back into becoming the reserve currency of choice, as the major fiat currencies are beset with issues.
After all, Alan Greenspan himself said when asked by a US Senate Banking committee in 1999 whether the US should sell its gold: “Gold still represents the ultimate form of payment in the world. Fiat money, in extremis, is accepted by nobody. Gold is always accepted.” Maybe that’s why central banks eventually became net buyers of gold again, in 2009, after being net sellers for decades. According to the World Gold Council central banks bought 440 tonnes of gold in 2011, the highest amount since 1964, and the buying continues.
LB Now became a BMG BullionBars Authorized Dealer in 2009 to facilitate the purchase and sale of gold and silver bullion on the London bullion market. Clients can either take delivery or keep their bullion bars in allocated and insured storage in either Toronto, Hong Kong or New York. LB Now bullion services are available to everyone. For more information on becoming an approved client for bullion services, please contact us.