Nick Barisheff's New Book: $10,000 Gold

I have seen Nick Barisheff writing about gold on various forums for some time now, he is a consistent and clear writer about gold and macroeconomic conditions.  He has a brand new (2013) book out now: $10,000 Gold. I saw the book advertised from my web browsing, but had been unable to find it in bookstores, although Barnes and Noble said they could order it for me.  Ah, no thanks, I prefer to look at a book first...

He is the founder and CEO of BMG Bullion Management Group, Inc. of Toronto, Canada.  BMG provides buying gold bullion and stores it on behalf of their customers.  It appears like a company similar to those who offer allocated gold (where the Buyer owns a specific bar, and the Custodian stores it for a fee).  Here is their blog:

blog.bmgbullion.com

His idea of allocated gold being safer than personal possession is probably because (I believe) he is aiming much of this book at large investors who may not be able to safely store (?) a lot of gold.  Allocated gold, of course, is not fully safe either (ask MF Global clients who were robbed of their allocated gold).

Barisheff is highly respected and can be seen from time-to-time at 24hgold.com, among other websites.

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Barisheff presents many reasons why he believes gold will go to $10,000 per ounce or more, but the three main reasons he analyzes in depth are government debt (by far his biggest reason), population growth and peak resources (especially oil).  He also ties demographics (our aging population), job outsourcing, foreign rejection if the US dollar in recent & likely future international trade, and the movement of gold into stronger hands of the East (China and Russia).

After the Introduction, he starts in with gold and monetary history, showing many elements most of us are already familiar with (thousands of years of gold being valued by humanity, the debasement of the dollar over the last 100 years since the Federal Reserve was created, etc.).

Throughout the course of his book he refers to many other well recognized experts in the gold community (John Embry, Jim Sinclair, Chris Martenson, Andrew Maguire, Murray Rothbard, Chris Powell and John Mauldin.  Some of these quotations I will mention below.

With such a nice big fat number like $10,000 per ounce, I was hoping that Barisheff would at least mention or analyze even briefly FOFOA's Freegold ideas ("$55,000" per oz, read his blog: fofoa.blogspot.com), but he does not, even though he shares many of FOFOA's ideas.  It is important to understand that FOFOA studies a narrow part of the whole realm of gold in great detail and with what appears to be impeccable logic.  Maybe he did not want to venture into the arena of $55,000 gold thinking it might scare off potential book buyers..., but more likely he does not believe FOFOA's arguments (or perhaps has never even heard of him).  Note that Jim Sinclair has waded somewhat into Freegold territory predicting $50,000 gold, but for somewhat different reasons and dismissing some of FOFOA's arguments and dissing some of his followers...

In general, his book is a little dense, especially for those not familiar with the various dynamics of gold.  The book may be somewhat dense, but persistence is very worth it, Barisheff does a fine job of making the case of buying and holding physical gold.

His discussion of the GLD ETF is very detailed for example, the GLD is very complex, the only other serious discussion of how the GLD works was written by the mighty FOFOA...

He also discusses "financial repression" (inflation, central bank control of [low] interest rates, compulsory funding, and capital controls) in great detail, this alone is almost worth the price of the book.  Financial repression is essentially a set of policies aimed at making savers pay the price for excessive government debt (irresponsibility).

Barisheff provides many graphs and illustrations to make his ideas clear.

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Barisheff is fully convinced that the powers that be ("TPTB") are using "management of perception" to restrain demand for gold (that is, lie about gold and its safety).  That concept of perception management is similar to Jim Sinclair's "MOPE" (Management of Perception Economics).

He is also one that believes and clearly states that the governments, banks and brokers are lying to us.  As do I.  They are lying to us, and the personal responsibility is each of ours to keep ourselves financially secure.  Silver and societal analyst Chris Duane:

"No one really cares about you and no one is coming to save you."  This is the truth.

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Even though it is too much debt (causing inflation, and big price movements in all our consumer products are coming...) that is his main argument, he quotes many different gold and other respected financial analysts, I present some here (many of you have seen these or variations) on the precarious and predatory nature of our financial system:

Barisheff himself (commenting on the real estate boom):

"Perhaps most telling was the constant refrain of investment advisers that "this time it's different."  It is never different."

Ex-Goldman Sachs executive Greg Smith (emphasis mine):

"I believe I have worked here long enough to understand the trajectory of its culture, its people and its identity.  And I can honestly say the environment now is as toxic and destructive as I have ever seen it."

Standard Chartered Bank (Page 158), (re gold is a better investment than gold miners):

"There are few large deposits, and most mines have difficult geological and metallurgical conditions."

Erste Group (Page 160, from June 2010):

"From 1830 to 1920 the average content of gold per tonne was 22g, today it is 0.8g per tonne.  On the one hand this is due to the economies of scale, the increased gold price, and new technologies (heap leaching, etc.), on the other hand the easily extractable, high-grade deposits are already depleted."

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But, it is NOT the experts he quotes that are the most valuable nuggets (sorry!) of his book.  The clearest case is that very high, and ever growing exponential debt, is what will wreck the system and propel gold to very high prices.

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Barisheff sees real value (as do I) in silver and platinum, where FOFOA does not (FOFOA's single m,ain reason he does not is that the world "has already chosen" its store of value, the central banks hold gold, not silver or platinum -- although I am grossly over-simplifying FOFOA's reasoning).

Gold likely will have a huge "reset" upwards in value, I believe that it will.  Silver and platinum likely will not go along for the ride (or at least most of it).  But, I do not know this, and I do not know the future, however logically explained.

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I have but small nitpicks with Barisheff's book:

1)  I would like to have seen FOFOA's revolutionary ideas discussed.  FOFOA is clearly one of the top gold analysts in the world, and his ideas are so revolutionary that they need to be debated in detail.  (For example, FOFOA would argue that Erste Group's comments above on fewer and lower-grade gold mines are NOT very important, due to the very high stock-to-flow of gold)

2)  Page 178, the silver was taken from our QUARTERS in 1965 (not nickels).

3)  I myself believe that individuals should store their own gold (securely) if at all possible rather than using gold storage services (allocated gold), even services as his own BMG Bullion Group.

But, other than the above three minor quibbles, this is an important and well-written book that all smart, independent-thinkers should own.

I cannot recommend this book more highly to all who have at least some financial literacy.  This is about as high a recommendation that I can give.

If you have any doubts about our financial system, and are not owners of gold, this is a "must read" book that speaks the truth.