Saturday, March 14, 2009

Dave Ramsey Thinks Buying Gold Is Stupid And Doesn't Understand Inflation

In the last year I've had a few friends and family mention Dave Ramsey. I looked him up and found he was pretty popular, but when I investigated his teachings they seemed like they were basically the same teachings of Ron Blue and since I read Ron Blue's book years ago I didn't investigate further. But then the other day my wife said she heard Dave Ramsey recommending against buying gold and that intrigued me. What were his reasons? Well I came across this show transcript from January 26, 2009.

RAMSEY: Tonight's "Myth vs. Truth," Myth, gold is a good investment.

(LAUGHTER)

Truth, gold has a poor track record. That's being real nice. Gold sucks. I don't care how many ads you see on TV or listen to on talk radio, do not buy gold as an investment. Listen, you're playing the commodities market, come on. Seriously, this is the most volatile market on the planet. Well, gold is what everybody goes to if the world comes to an end. A failed economy does not return to the gold standard. Show me one since the Roman Empire that did. It never has.

We used the gold standard at different times. But gold has no more intrinsic value than paper does. It's just because somebody is willing to exchange it.

Let me tell you what happens in a failed economy. Look at Katrina hitting New Orleans. There is a temporarily failed the economy, a micro collapse. What happens? Gas becomes very valuable. A bottle of water becomes valuable. clean blue jeans or shoes are a big deal. Those are the kinds of commodities you want in a failed economy.

Y2K people did not pile gold into their garage. Well, some of them did. But they got water and electricity and they got canned food and they prepared that way for something that didn't happen. That is how some people prepare. They would not go out and trade gold bars if things happened bad at Y2K.

This survivalist crap does not work with gold deal. And gold has a 70-year track record of 4.3 percent average annual return. That is horrible. It does even keep up with inflation.

I've got to tell you, I am really sick of these commercials. They're everywhere. They're so cheesy to start with. But here's the deal, -- it is a crummy investment with a crummy track record. I do not own any gold, except some cool cufflinks and one watch. Other than that, that's it. I do not have a little bit over here just in case. I don't play with it. It is a precious metal investment. Silver is the same thing. Art is the same thing as a collectible. It is ridiculous. You'd be better off to invest in guns then gold, because of these they have a utilitarian value should something happen. Seriously. Gold? Come on. But people bite on this stuff, because they have this illusion. All the conspiracy theorist guys get into it.


It seems Dave Ramsey only thinks of Gold in terms of as an investment and he also seems to not be aware that in Zimbabwe they are bartering with Gold for food.

So I wrote Dave Ramsey the following letter:
Hi Dave,

I have heard good things about you and your advice. I know a few couples who you've helped. I heard you didn't recommend gold and that you've stated that gold is never used for bartering.

In case you're not aware - right now in Zimbabwe the people no longer use currency because the market sellers only want gold and hyperinflation has destroyed their currency! They work all day panning for gold to buy bread. Here is an amazing video report talking about it.

http://www.guardian.co.uk/world/video/2009/feb/11/zimbabwe-gold-panning-starvation-food

There are various reasons to buy gold and silver. One is for investment purposes - but there is another reason - for insurance purposes against various scenarios as a way to barter and a way to preserve wealth. For example: Hyper-Inflation or the collapse of a currency.

Best of luck,


Within an hour I received the following reply from his customer service representative:

This information provided below is from the Dave’s Radio Show:

http://www.daveramsey.com/etc/askdave/?intContentId=6240

Gold Investments

QUESTION:
A listener says a lot of people are asking about gold investments. Is this a good idea?
------------------------------------------------------

ANSWER:

On-air call from The Dave Ramsey Show -

2) Read what Dave says:
It’s a bad idea to invest in gold. Everyone’s talking about it right now because gold is really high.

In the book, Stocks for the Long Run, Jeremy Segall has a graph that shows what would have happened to a single dollar invested in gold, bonds and stocks since 1801.

One dollar invested in bonds in 1801 would yield $13,975 today.
One dollar invested in stocks in 1801 would be worth $8.8 million today.
One dollar invested in gold in 1801 would be worth $14 today.

Via: The Dave Ramsey Show –

Question: Amanda's dad is reading a book and is convinced that the stock market is about to crash and wants to pull all his money out and buy gold overseas. She doesn't know enough to talk some sense into him. What can Dave say?

Dave Ramsey's advice: I'll be as nice as I can ... I think it's absolutely ludicrous! I have seen books like this come out every year since I could read. I've heard the end of the world predicted every year. Could the stock market crash? Yes, but there is no indication that he should say this. I CAN'T BELIEVE THIS! This author is a nut burger. The end of the world is not coming.

In order for the stock market to crash, companies like Microsoft, Ford, GM, Home Depot, GE, Whirlpool and all those other big companies have to close. Not decrease in business, but CLOSE! Can you honestly imagine all of those companies closing? Our stock market operates differently now than in 1929; there are many more safeguards now. Less than two months after 9/11, the market was back up to the level it was on September 10. The people who make these predictions are doomsayers.

I don't own any gold or silver, nor am I buying precious metals as investments. The returns are horrible and the volatility is all over the place. The stock market looks like a cake walk next to gold. I own mutual funds and paid for real estate, and I'm not moving a dime on the advice of this author.


Investing In Silver

QUESTION: Mark asks about silver as an investment, since he was talked into it. It’s worth $7,900 and he doesn’t know if he should keep it. He makes $50,000 a year. Dave tells him why playing with silver is like playing blackjack ... not good.

--------------------------------------

ANSWER:
When you play precious metals, you are gambling with about the same odds as playing a blackjack hand. You are not investing … you are speculating. This thing can go south on you in a hurry. This is gambling, and I would get out of it.


The response didn't really reply to my email. I haven't heard anything further.

Incidentally - the exchange above with Amanda took place in January 23, 2008. The book her dad was reading is called Crash Proof: How to Profit From the Coming Economic Collapse (Lynn Sonberg Books) (You can read my review Here. Oh, and by the way, Peter Schiff was largely right when he wrote that book.).

You can hear a recording of the exchange with Amanda in this YouTube video: (If you're getting this post in email form you may have to visit mountainsteps.blogspot.com to see the YouTube view)


By the way - as I explored Dave Ramsey's website I found out that he doesn't seem to understand what inflation is:
From Dave's Website: http://www.daveramsey.com/etc/askdave/index.cfm?event=dspAskDave&intContentItemId=10639

Explanation Of Inflation
Janine has a pretty basic question ... how does inflation work, and how can we stop it?
QUESTION: Janine wants to know what causes inflation, and how can it be stopped. Dave tells her what goes into it.

ANSWER: Inflation is the increase of the cost of something. If the inflation rate of gasoline is 10%, that means the cost of gasoline went up 10%. What causes things to go up in price are a lot of variables. One thing that can make it happen is supply and demand. If there are 100 people wanting 10 things, there will be a bidding war that will drive the price up. Conversely, if there are 10 people wanting 100 things, the demand is not as great and the price goes down.

Some other items in our economy have more complicated things to do with it. For example, if you buy food from outside the country, that country’s economy affects average inflation in this economy. If you’re buying a house and the shingles on the roof are more expensive because of oil in the shingles, then oil caused housing prices to go up. It gets very complicated and interconnected at that point. Basically, inflation is just the increase of prices.


Dave Ramsey is wrong - what he is describing is not the inflation that the caller was calling about. What Dave Ramsey is describing is price fluctuations due to supply and demand - not inflation caused by the devaluing of a currencies worth because of the amount of money in circulation. What is happening in Zimbabwe is not simply "just the increase of prices".

My conclusion here is that Dave Ramsey is brilliant at helping people get out of debt - he's designed a program that seems to have amazing results. And if you need to get out of debt you might want to consider his advice. But for investments (he seems to prefer rental property and growth mutual funds) he doesn't seem to have an accurate understanding of the larger picture and you may want to see what he says and balance it with other peoples advice (or just trust your gut instinct and do what you think is right.) He also seems a bit too quick to discount people by calling them "nutburger's".

I wish Dave the best of luck, but wish he was aware of what is happening in Zimbabwe and could understand Gold and Silver isn't just for investments. He is in a position to encourage people to prepare, but he seems to prefer to call people getting prepared "nutburger's" instead.

TAGS: Dave Ramsey On Gold, Dave Ramsey On Buying Gold, Dave Ramsey Investment Strategy,

51 comments:

  1. Dave tells people the obvious because they were too stupid to figure it out on their own. So his advice is geared towards them. He is appealing to the lowest common denominator. Dave is no worse than the thousands of other so called financial advisers or TV pundits that told people to buy and hold. He is actually better than most because he is really trying to help people.

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  2. Dave needs to look at the gold charts for the last ten years. He's an all right guy--kind of a "Dr. Phil" for the trailer trash folks who are slaves to credit card debt--but as you say he sounds somewhat ignorant about the intrinsic value of precious metals. Gold is the only currency or commodity to hold value for over 5,000 years (you can't say the same for dollars or oil or stocks).

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  3. i agree dave is good to listen to while driving. i think gold is good for conductivity but i cant eat gold, yes i could trade it but what do i do once its gone? i cant trade gold for more gold. but i can trade labor for food, i can buy a gun and shoot my food. i can ride my bike for transportation, i can chop wood with an axe. gold will only work for so long.

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  4. Gold is dumb. If the economy collapses and there is total anarchy, it won't be as if all the hoodlums will beg for gold or else they rape our women and take our homes, will it??

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  5. What if the economy collapses and there is NOT total anarchy? I find it interesting the either / or scenarios people have. Either the economy always is great or there has to be a total anarchic collapse. Couldn't there be more options/scenarios?

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  6. Dave Ramsey is a multi millionaire - ill take his advise over you losers here anytime. Gold is a HORRIBLE investment and data proves it. Stop looking at the past 2 years and look long-term.

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  7. rofl, Warren Buffet is a billionaire. He bought 1/3 of the world's silver at one point. What's your point?

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  8. I think Ramsey is quite good at what he does best, and that’s training and counseling individuals to live within their means … and that means, “free of debt.” Indeed, we are 10 weeks into his 13-week Financial Peace University at our church. In the past, we had only worked Dave’s approach to home finances about 70% of the way — but now we’re trying to seal the deal and take it all the way: no credit cards, month budgets on paper, saving like fiends, etc.

    Unfortunately, Dave he falls flat when he bad-mouths precious metals as “stupid.” His mantra that “metals are never used in the barter economies that follow disasters” is a straw man argument (though somewhat understandable, given that some metal and coin dealers seem to imply that metals will be money when the feces hits the fan).

    Precious metals shouldn’t be bought/held primarily for a “social meltdown” scenario, but as an historically-reliable store of value.

    A couple of ignorant things I’ve heard Dave say recently about precious metals:

    • “They have no more intrinsic value than a shoelace.” (IOW, precious metals only have value because man assigns it value and does so arbitrarily — we could just as easily assign similar value to dirt!) I’m utterly amazed that Dave doesn’t grasp fundamental principles of value found in precious metals such as world-wide recognizability and desirability, ease of divisibility and transportability, and high value in relation to volume and weight.

    • “Precious metals haven’t been a medium of exchange since the Roman empire.” This is simple ignorance of history. What does Dave think the value of US currency was pegged to by law until only 1971? (Not to mention the fact that US quarters, dimes, and dollar and half-dollar coins were 90% silver until 1964!)

    It is a paradox that, while preaching so faithfully against personal indebtedness, Dave won’t/can’t preach against our government’s indebtedness and the central-bank-issued fiat currency that aids and abets it. I know Dave is a Bible-believing Christian — well, the Bible vehemently condemns theft by the use of unjust weights and measures, which is precisely what fiat currency is: “faith-based” money that is backed up by absolutely nothing and which results in that most insidious a invisible of taxes, a.k.a. inflation. (Oh, incidentally, Dave has defined “inflation” as price increases due to variables of supply and demand. Yes, prices do fluctuate as a result of supply and demand, but inflation is an increase in the amount of money in circulation at the hands of central banks and government-owned printing presses. When more money is pumped into the system via the printing press or electronic credits, it serves to devalue the money already in circulation, and prices rise in response to that. IOW, long-term price increases are not inflation, but rather they are a symptom of inflation — more money chasing after a fixed amount of goods. The best example I can point to is the artificial boom in home values earlier this decade, which were the direct result of the ease with which more and more people were able to get loans. I.e., more money — in the form of credit — chasing after a fixed supply of houses.)

    For a different — and reliable — take on our current economic mess, I would urge you to spend some time reading the articles and watching the videos of Peter Schiff. Just Google him … you’ll find him. Peter is also “death on debt” — but he called the current financial mess a few years ago, based on the fact that Americans and their government borrow endlessly to buy things they simply cannot afford. I.e., rampant consumerism and endless lines of credit.

    BTW, Barry Broome wrote an excellent piece at his DebtPrison.net blog last year: "Dave Ramsey, Peter Schiff, and decline of U.S. Economy." Broome also likes Dave alot, but by way of comparison to Peter Schiff, levies some fair (though gracious) criticism of Dave's economic presuppositions. The article is great in itself, but be sure not to miss the 80-some comments that follow — lots of valuable insight there, as well.

    I love Dave for what he does well, but he has a ways to go to understand the government-monetary-policy basis for the dire straits in which our nation currently finds itself.

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  9. I've posted a book review of Peter Schiffs book Crashproof and it also has two of Peter Schiffs videos.

    http://mountainsteps.blogspot.com/2009/03/book-review-crash-proof-how-to-profit.html

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  10. "'Precious metals haven’t been a medium of exchange since the Roman empire.' This is simple ignorance of history. What does Dave think the value of US currency was pegged to by law until only 1971? (Not to mention the fact that US quarters, dimes, and dollar and half-dollar coins were 90% silver until 1964!)"

    US currency was BASED on the value of gold, but gold itself has no value alone. its only as valuable as what someone sees as worth trading you something for, whether it be money, goods, or services.

    and just cuz something is made of something, it doesnt meant the material is worth anything. cash is made of paper (i know, its like cotton and some other stuff really), but do u think the paper its printed on is worth the actual value of the dollar? no.

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  11. "US currency was BASED on the value of gold, but gold itself has no value alone. its only as valuable as what someone sees as worth trading you something for, whether it be money, goods, or services." ~ Anonymous

    That's very true. The thing that gives me pause though is that I don't think there's ever been a time when Gold has been worth nothing - and there are literally hundreds of paper currencies that are now worth nothing.

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  12. It seems to me investing in Gold is if you believe the depression is coming and have little faith in our US economy. I have to say Obama's growing the gov't is scary but a majority of US citizens usually see what's going on and we come out OK. Were coming out of a bad bad painful recession, but in the past we swing hard the other way, so when the economy rages positive again, jump in hold on and save for the next downturn. Hey even squirrels stock up, but not in gold. They stock up in something of value. Real Estate, skills, cash. Peace out.

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  13. Anonymous your statement might sound intelligent but it is highly ignorant of what is actually going on right now and has been going on for the past several years or more. There is a full-scale liquidation of the dollars value going on thru bailouts, Fed spending and now monetizing debt, limitless exposure of the U.S. citizens to bankers failures and greed (somewhere in the realm of $27.3 TRILLION, yes TRILLION dollars). When the devaluing of the currency is as rapid as it has been, compounded by nations showing no confidence in the dollar and looking elsewhere for another reserve currency - well you cannot look to U.S. history for a gauge on how this will pan out. We are in unprecedented circumstances and the prospects are bad, worse and apocalyptic.

    Call me a cynic, call me a nut, call me a conspiracy theorist, none of that changes the fact that you are ignorant of the events surrounding you - just as Dave Ramsey is completely oblivious as to why one would invest in Gold. He has never been convincing to me in his rants against gold, though he is very well spoken and impressive on other issues - this is one in which I am afraid he has dug in so deep that to turn around would require an immense level of humility and an enormous apology to millions of listeners and might cause the collapse of his marketshare.

    One thing I need to ask Dave and those other professing Christians who are loading up their 401K's and retirement plans - have you ever tried to get your money out? Have you ever had to wait 6 months plus to get your hard earned money while a Wall Street company put up hoop after hoop for you to jump thru to access your own money? That happened to me in 1996 - do you think it has improved since then? What happens when a freefall happens to the economy and people are scrambling to access their money? None of this will make it easier for Joe Citizen to get their retirement money, yet if you have gold on hand and are not forced to liquidate your investments, you are far better prepared for hard times as gold has NEVER been worthless and abslutely will carry value in hard times as it has in Zimbabwe of late.

    Take Dave with a grain of salt and do some research on gold as a hedge against inflation and the disappearing value of the US dollar.

    God Bless.
    Bill

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  14. Gold is good for getting men out of trouble, period. It's not good for industrial uses like Platinum, so I'll stick to a metal that has a true marketable purpose.

    This reminds me of the old story of the Barber Shop investors. When your Barber starts talking about what he thinks are good investments, it's time to get out.

    My father-in-law invested in dot-coms just before the crash. My brother invested in real estate just before the crash. My broker tells me to buy gold now before it goes much higher because "everybody is doing it." That tells me the party is over.

    Time for me to buy real estate while all the gold investors are selling their devalued homes!! I can do it because I"m debt free.

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    Replies
    1. I've known some pretty astute barbers as investors. They get free advice daily from financial planners, stock salesmen, bankers, tax lawyers and CPAs who are getting their whiskers clipped.

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  15. Not even close to everyone is buying gold. Next time you are at a party or a big gathering. Ask people if they have any gold. You may find one or two that might have gold.

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  16. I love the people who try and degrade Dave and his listeners: as "dumb trailer park dwellers who are slaves to credit" H-ello, the vast majority of the US population is in debt, not just honky tonk people. All you're doing is showing your ignorance. Gold will only last for so long. We're in Zimbabwe so we don't have mountains to go up into and search for more gold. I live in Chicago, where am I going to get this magical gold after my stock pile is used up?

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  17. I agree with Dave on gold. 99% of the world's gold that was ever mined is still in existence. Where he is wrong is on silver. Silver supplies throughout the entire world are dwindling. It gets used and never recovered. For instance many medicines use silver (never gets recovered), many electronic gadgets have silver that never gets recovered. Silver is not only an inflation play but also a supply and demand play. I realize silver is a gamble but isn't the stock market a gamble? Isn't any investment inherently a gamble? By the way, I've read Peter Schiff's book and not only was he right about absolutely everything that happened but also the rationale behind it. To Dave....my stock market investments over the last 10 years averaged 0.5% gain per year. My real estate investment was entirely flat. But my silver investment made in 2002 TRIPLED (and I sold it)!!! Pretty bad investment huh. My suggestion...take Dave's advice on debt, Jim Kramer's advice on the stock market and Peter Schiff's advice on macroeconomics and then you have yourself a financial plan.

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  18. Dave Ramsey is a perfect example of the blind leading the blind. He takes one good piece of advice; "get out of debt" and surrounds it with BS. It's a shame people are stupid enough to purchase his garbage.

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  19. All or nothing. All or nothing. Haven't you heard of "take what you like and leave the rest"? We were $500 in the hole each month, lack of discipline with a tight budget. That was two years ago. Today, we just paid off our $350,000 home and all our debt. Using Ramsey's encouragement, compassion and common sense and the grace of a merciful God. So you call that stupid?
    We may buy some gold, in spite of his advice, because we take what we like and leave the rest. There was only one perfect man, and it sure isn't any of us.

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  20. I like Dave as the debt killer. But he is too arrogant and is often just flat out wrong. He commented the other day to a homeowner getting a remodel and gave horrible advice (didn't even mention lien releases- make sure their bonded and insured...good luck with that!) Peter Schiff is no idiot- and never went Bankrupt.
    Precious Metals have their place. Look at Gold VS the dollar since 1971 when it became freely traded (because of the run on the crappy dollar, Nixon had no choice) Fact- Gold/Silver has a place as a store of value- IT AINT DUMB. In the last 100 years the US dollar has lost 93% of its purchasing power. Gold/Silver will never be 0 as long as there is civilization. Calling it stupid and dumb is just stupid and dumb.

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  21. I watched a June 15th TV broadcast when Dave ranted about gold and silver. I believe he hasn't spent much time researching the precious metals market and is misusing statistics and historical information due to lack of education, as the above June 10th commenter points out. The price of gold was set by our government for an ounce of gold from 1794 under the Constitution. The price gradually was increased from just over $19 to the present value of $42 per ounce (for our government's gold stores). However, gold became "market-based" after the Federal government reneged on backing Federal Reserve Notes internationally with gold bullion in August, 1971. The value of gold was allowed to "float" in the market. Gold has shot up from $42 to the present approximately $1200 per troy ounce. Of course timing is important (that is, when you purchase). One can use dollar-cost averaging when purchasing precious metals just like purchasing shares in mutual funds. One can set up precious metals IRAs. I have several assets, including mutual funds, real estate, life insurance, bonds, CDs, gold and silver. In the last 14 years gold and silver have out performed all no contest! Will gold and silver continue to out perform other assets? Who knows? However, if Dave was giving me his advice on not investing in gold and silver in 1997 I'd be in a world of hurt now. His advice on paying off debt and steady investing in indexed mutual funds is sound. His knowledge of precious metals as an investment may be his chink in armor. However, he does have his gold watch and cool cuff links. Genesis 2:11&12.

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  22. Dave is right about inflation. Inflation is increases in price over time. Increasing the money supply is only one possible cause of inflation. Often increasing the amount of money in the system does not cause inflation and is necessary to promote economic activity. Right now, we are increasing the money supply and watching our economy teeter on the brink of an even worse problem--deflation.

    http://www.investopedia.com/terms/i/inflation.asp

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  23. The previous commenter seems to be parroting what the commenter has heard on Dave Ramsey or in public college Keynesian economics courses. Some inflation may be due to shortages or monopoly development, but general inflation is caused by monetary production increase. It takes 6 months to 2 years for newly printed credit money to work its way through the economy to form general inflation. Increases in prices over time is an indication of continuing devaluation of the U.S. electronic/paper credit dollar. Overproduction of money (mostly in electronic form) does not bring general prosperity. The real estate bubble was caused by the issuance of cheap debt money and look at the prosperity it has brought. Right now we have deflation because banks have contracted the money supply as debts are paid off and new debts are slow to materialize. The previous commenter, with all due respect, does not understand the nature of commodity backed money and unbacked paper money. Neither does Dave Ramsey, judging by his comments on his June 14th Fox Business News show.

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  24. Why do so many posters feel so strongly about gold? Dave's advice on gold as a long term investment is an absolute fact. Look at gold performance averages over the last 200 years. Once compared to inflation it is a horrible investment. People are buying gold now because of fear. I've never heard any investment advice that recommends using fear as a tool for an investment decision.

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  25. Wow, I don't know what to think of that Dave Ramsey guy. Anyone who says Glen Beck is *not* a nut but Peter Schiff is really can't be trusted to give any sound advice.

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  26. In the years to come when I drive by the homeless, living in the tent cities with no hope left and my boy says, "Daddy, do you feel sorry for those people?" I will answer, "No son, I don't feel sorry for them. Those are the people who said gold was a poor investment and I was a fool for buying 85 ounces at $474 (Sept. 05)". Anyone who listens to a simpleton like Dave Ramsey will get exactly what they deserve and will deserve exactly what they get.

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  27. So now your $40,290 (September '05) is worth $120,700 (December '10). Good on you. How long is that going to last you in this mythical world where everybody but you and your son (and the other few thousand people around the globe who own some of the shiny gold metal that if put in one place at one time wouldn't fill up three olympic sized swimming pools?) are driving by the hundreds of thousands "living in the tent cities"? Because if that's what it comes down to (a few thousand people have significant gold holdings while tens of millions do not, and gold allows you to live in cars and not having gold puts you in a tent) things are not going to be quite so rosy for those lugging gold their gold bars around.

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  28. Dave Ramsey is good at helping people get out of debt. That is what he is good at and he should stick to that and that alone.

    When he begins speaking about precious metals he is not taking into account that silver and gold are money. They have been money for over 5000 years. The US Constitution says that they are money. The garbage called money that the Fed is printing into oblivion is not money, it is considerd debt. Just paper and ink, and the more of it you print, the less it is worth.
    Gold and silver are MONEY, and the only money that matters. You can not print silver and gold until they are worthless as the Fed and our Treasury are doing with our present currency.

    Soon, our fiat cash will become trash, then EVERYBODY including Mr. Ramsey will start buying it. Because it is REAL MONEY.

    Stick to debt relief Dave, and leave economics to Mr. Schiff.

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  29. Dave Ramsey is a uniquely evil SOB. He uses Our Lord to spread LIES (or perpetuate the lie) regarding the DEFINITION of MONEY. I feel bad for the people who attached themselves to Daves (infantile) message of removing debt and saving "money".

    Today's "money" is a "paper ponze" scheme...and as with ALL ponze schemes, the last ones in (which WILL be Daves listeners) will be the ones holding the worthless bag of "money" when the dollar collapses (as ALL FIAT CURRENCIES HAVE DONE SINCE THE BEGINNING OF TIME!) This is why Dave's is a uniquely EVIL Piece of dog shit.

    You can bet that the "BIG MONEY" will be fully DIVESTED of dollars when the dollar eventually returns to it's true value of ZERO.

    To the Dave Ramsey ASS LOVERS out there, enjoy you monopoly money...you are helping the BANKSTERS TODAY by paying off your debt. In the future, when the banksters have GOLD and SILVER (paid with by YOUR money), you will be competing with them in the (global) market place with you PAPER dollars...and YOU will LOSE...again!

    This is really simple people, Dave Ramsey is an evil piece of shit and people who follow him will be screwed inside of 5 years.

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  30. Thanks for your blog and piece about gold/silver.

    Everyone you ask will have their own take on the economy and the future of our country and our currency.

    Here's mine.

    I have zero faith on our dollar in the long term.

    I see no way for us to legitimately get out of our national debt problem. It's gone to far and imo is just a matter of time before the house of cards built on monopoly money collapses.

    That said, I'm not buying gold...it's actually out of my price range. But if I did, it would be the smallest denomination coins possible. Or 1/2 .oz rounds or such.

    In my opinion Silver coins are the best buy. The pre-1964 has 90% silver content,which is widely known and it's minted currency (junk silver)

    I buy silver dimes. Easily dividable and a known precious metal.

    When the dollar falls, which I believe it inevitably will. There will be need for other ways to trade for goods and services.

    I believe precious metals will withhold some type of value far beyond that of worthless paper of a failed economy.

    So I'm buying some silver, along with ammo, food, water, basic tools and all that I can think of that I would need to carry on day to day the best I can without any city/gov help.

    It's a cliche I know...but I'd rather be as prepared as I can be and be wrong, than be right and not ;)

    The dollar will fall, I firmly believe that. So I suggest buying extra of any type of item you believe will be of value to yourself/family and others.

    Regards2All

    Stu

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  31. Dave Ramsey thinking is fuzzy-First,as a Christian he must believe that there could be a end times scenario predicted in the Bible and looking at events in the world scripturally it would not be unreasonable to think one might just be in the last days so one wonders if Dave really believes what he is saving or is just doesn't believe in the end times as laid out in the Bible as a probable scenario-if he does,he would realize stock and bonds will not be of much use and really,a sound investment might be having a good store of food hidden someplace and something like silver or gold because you will not be able to buy or sell without the mark of the beast which means one will be foreced to barter if Christians are still here. The only way to reconcile Dave's philosophy is he is a Christian but he doesn't think the end times will arrive anytime soon.

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  32. Amen.

    Dave Ramsey calls himself a Christian, and I am glad for him. He has also said that he is a Christian Counselor. OK, then I think he has missed the book of Proverbs. The Lord set up the monetary system and the regulations of proper weights and measures. He also says that if we or any government breaks these rules, they break his Covenant with him.
    Our government has been breaking this covenant for many years, inflating us into oblivion, yet Dave just keeps saying that "Debt is Dumb" and "Cash is King" on his show. I agree that debt is dumb, but cash is NOT king. Every dollar in existence is owed to someone. That being the case, I would have to relabel his moniker as "Cash is Debt."
    Silver and gold are money, period. They have been for 5000 years. Our fiat money system is DEBT. It breaks God's covenant of proper and moral weights and measures. It robs people of their wealth by constant and continued price inflation using money printing out of thin air and fractional reserve banking. It BREAKS GOD's COVENANT with his people. Come on Dave, read Proverbs again.

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  33. I got a new motto for his radio program:

    "The Dave Ramsey Show where Debt is Dumb, Cash is Trash and the accumulation of Gold and Silver have taken the place of the new BMW!

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  34. "Debt is Dumb, Cash is Trash and Gold and Silver have taken the place of the new BMW."

    Every dollar in existence today is now considered debt, owed to someone. So cash is now considered DEBT.

    Cash can not be KING as Mr. Ramsey says as it is now considered to be DEBT. So, if "Debt is Dumb", then so is CASH, as it is DEBT.

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  35. My mother followed Dave's stay the course the market always comes back advice - She lost a third of the value in the stock market the past couple of years - If she stays the course maybe she will come out OK in 2050 but she will be long gone. People that lost big in 1986 were just breaking even in 2007. I invested in gold and silver stocks - family members said NO that is crazy. I am up from a high of 1000% to a low of about 200% on my precious metals stocks because I knew Dave did not know what he was talking about. Gold is now at 1465 and silver over $40 per ounce; when it hits twice this much Dave will still be saying the same stupid stuff. If Gold is so bad why is he promoting a company that is buying gold? What are they going to do with it? Maybe Dave is really smart getting people to sell him their gold? Hmmm. There is a thought!

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  36. I'm taking Financial Peace University and we just finished the segment on investments. I hear the statement you posted above and couldn't believe what I was listening to.

    This, coming from a man who is a correspondent on a channel that plays a pro-gold/silver commercial every third one, Fox News.

    His analogy on post-Katrina New Orleans is flawed and out of context. Obviously, in a "temporarily failed the economy" gold/silver would not be used to barter with. Especially in an economy where the "legal tender" was still valid. He used a micro-economy, the city of New Orleans, which is surrounded by a nation whose main currency was still the Dollar.

    When/if there is societal collapse and the Dollar is not even worth the paper it is printed on, I'm going to thank my lucky stars I didn't have my money "diversified" in corporate America through stocks, mutual funds, and money markets.

    To each his own, I suppose. I tried to relay this information to my group mates who simply looked at me like I were a "nutburger" and continued believing "how could a multi-millionaire be wrong".

    You are correct, Dave Ramsey is excellent at teaching "personal budgeting" but much to reliant and trustworthy of our Federal Reserve and corporate America. This segment almost made me want to quit the "University" all together, however since I paid for it I guess I will continue.

    Thanks for looking up his definition on "inflation". I was appalled to hear how his website described it.

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  37. FYI - my story... I was $2 million dollars in debt, lost everything, and on the verge of suicide. I started listening to Dave and he not only motivated me to not give up, but taught me the way out of the mess I got myself in. I have paid all but $100k off. I am still working the plan and working my butt off, but I didn't file bankruptcy and stick the debt on someone else. I am glad I didn't, it has been a long hard road, but looking back it was the best thing that ever happened to me. At least now I am awake!
    For the trailer trash comment - you are an idiot. I was a succesful business owner for over 15 years and made millions of honest dollars over the years. My going broke was my stupity and placing my trust in a few morons. Buying gold is fine if you are debt free and can afford to lose some money. If you are trying to use it for a retirement fund than good luck to you! All of these comments sound exactly like what people were saying during the housing boom. That didn't turn out so well. I will stick with Dave's plan because I know it works. I pray for anyone in deep debt... It is a horrible and humbling experience to go completely broke, but never give up; learn from it and move on!

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  38. The people who call Dave's show and scream that they are "Debt Free" are being hoodwinked.

    Every fiat dollar in existence is considered DEBT owed to someone. The only thing considered MONEY in the world is Gold and Silver.

    Fiat funny money US coupons are not money, they are currency, passed on to us as "money." The difference between money and fiat currency is that fiat currency has no intrinsic worth, money (gold and silver) do have intrinsic worth.

    You are not out of Debt if you have US fiat coupons.
    You can get out of debt by acquiring silver and gold. They are REAL MONEY.

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  39. We agree on this issue, I am a fan of Dave Ramsey, but not enought to drink all the kool-aid. I agree with him that cash is important, but along with my 3-6 months of cash, I think the 3-6 months of food is more valuable. It doesn't matter how much money you have on hand, if there isn't anything on the shelf. Great post.

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  40. You can't print gold and you can't print silver into oblivion. Our founders knew this and that is why our Constitution says tht gold and silver are the ONLY forms of money.
    Bills of credit (the Constitution mentions this also) or fiat paper are not. The American people have been hoodwinked. They are walking around with Monopoly money in their wallets and purses thinking they are carrying REAL money. They are not.
    They are carrying worthless script which hemmorages more value each day. It would do all fiat paper lovers (including Dave Ramsey) to read the book: The Creature from Jekyll Island by G. Edward Griffin. He explains just how we lost our REAL money to the Feds long ago.

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  41. Gold and silver values does not change. Don't believe me?
    Gasoline cost 15 cents a gallon in 1915. Today, a gallon of gas cost $3.79

    Try this...Take two 1964 dimes down to your local coin shop. The coin dealer will pay you $5.00 in fiat currency for them. Now go buy a gallon of gas. You will spend 1-1/2 of the dimes you took to the dealer or 15 cents of REAL money.
    Gas (in silver-real money) still costs 15 cents a gallon!

    You see how much monetary value you have lost in your wallet with your funny money called "Federal Reserve Note" fiat currency?

    Or...
    In 1915 you could buy an expensive suit, a nice shirt, a pair of pants, a good pair of shoes and a nice belt with $30.00
    That was the price of Gold at that time. So, an ounce of Gold would buy you all of those clothes.
    Today, all of the aforementioned wardrobe would cost you about $1600.
    GEE! That is what an ounce of Gold is worth!!
    Gold and silver NEVER lose their value, your funny money has.
    Sorry Dave Ramsey, Gold and Silver are REAL money that do not lose their value. You will ALWAYS be in debt owning Federal Reserve Notes.

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  42. If Amanda had invested in the market in January of 2008 she would now have..........well, just about the same exact amount of money.

    If she would have invested in gold she would have participated in a rise from $1000 to over $1600 an ounce.

    But hey, Dave's the expert here, right?

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  43. Well, seeing as this blog post was from March 14, 2009 when gold was around $900 per ounce and today it closed at $1,836.46...I think it is safe to say Dave has been about as horrificly wrong on gold and has cost many of his listeners a substantial amount of money in bad investing advice(presently company included).

    The same people who said to buy cold in 2009 are now predicting that it will not peak out until around $2,500 at the very least.

    Is it still "ludicrous" to buy gold?

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  44. The gold price runs just the oppsite of the value of fiat currency. When gold goes up, it means the dollar is losing it's purchasing power and going down. Well you have seen what has happened to the dollar in the last 3 years. Gold cost $850.00 an ounce in 2008. It now costs $1850.00
    Gold never moves. The dollar does and it is sinking like a stone. Dave Ramsey needs a lesson in Economics.

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  45. Central banks hold gold.

    Central banks devalue currency.

    Politicians base their action off of election cycles, not sound economics (see www.mises.org)

    That is all the reason I need to continue buying and holding physical gold.

    Mr. Ramsey has made millions selling a Christian based debt elimination program to the secular world and the ministry community. His program works and he is very honest in his assesments. However, his investment advice is no better than the average college grad sitting in a "financial advisor" role. "Buy broad based mutual funds." <<yeah, those have done AWESOME!

    The funny thing this is just yesterday, Ramsey had a guy in his newsletter suggesting gold was a bad investment and that now is the time to sell your gold....to him, the CEO of "Gold Stash for Cash". My question: If gold is such a bad investment and has no upward trajectory, why is this guy's company willing to buy it right now?

    Ramsey is good for getting out of foolish debt, bad on investments. He is the Alcoholics Anonymous of debt. Don't listen to his investment advice.

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  46. There is no way to know how high gold and silver can go. You can not set their peak at any amount. That would be up to the currency printer (manipulators) like Mr. Ben Bernanke and his Keynesian pals.

    When Germany printed their Deutsche Marks into oblivion (like the Fed is doing now to the dollar) following WW1 Gold went as high as 14 TRILLION Marks per ounce. How high it goes in dollars still remains to be seen.
    Gold and dollars run inverse of one another. Gold is the "canary in the coal mine" where the strength of the dollar is concerned. Every time that Gold and Silver rise, the dollar loses more value.

    Gold and Silver are MONEY. Period.

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  47. I agree with the poster who stated that Dave has been so anti-gold for so long he really could not change course and still save face with his listeners. He is not "evil" and should be considered an authority for all those seeking to get out of serious debt. But as far as investing, Gold rules, forget it's so called “200 hundred year failure” (in which it still did not lose value). It has been coveted by the most primitive and advanced cultures alike for thousands of years and thousands of years from now when no one knows what a mutual fund is, gold will still be desired. All of society will never completely break down at least not for long. Study history and see that man will always reorganize and create some sort of social arrangement. From a kings crown to a third world dictators gold plated pistol, Gold is the status symbol of the ages and currency of choice past and present. Ancient tomb raiders were not seeking paper money and pirates did not set sail in search of municipal bonds. What we consider to be “money” today will be a simple footnote to history if it is remembered at all.

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  48. Wow, what an exchange of thought here! I'm impressed with the passion on both sides. Here's my story, and if any of you have walked closely with God and Christ, then you should get the following...

    About six years ago God told me to "look into metal". At that point in my life I knew nothing concerning metal except for what any average person might know.

    The message I received was strong and clear so I did what I was told, I looked into metal. After several weeks of reading and research I did decide that buying silver would be a good idea. So I did. That purchase has now grown over 400% in less than six years. This kind of result should not be ignored, dismissed or minimized.

    Since then I have acquired gold as well, based on advice from someone I trust. This person is not a Christian but he knows his stuff and God does use all sorts to help His own. My gold purchase has grown over 100% in less than three years. This is another example that should not be ignored.

    I too am familiar with Ramsey and Blue. I have undertaken Blue's financial training and it is sold. I do think Ramsey is good at getting people out of debt because what he repeats over and over is to not spend more than you make. This advice is fundamental, elementary if you will. Any wise person follows this principal, even God says to live like this. So, it's no secret.

    The problem/mistake that I see with most people is that they want someone else to think for them. Most want someone else, whom they respect, to tell them what to do. Why, well, sadly because most are lazy. If one were to take the time to do real research and not just take one person's word for it, one might learn more than what they are told.

    Don't forget that the mainstream media lies and withholds information. What's more is that people like Ramsey don't know everything and are broken and flawed just like everyone else, even if they don't think so.

    Ramsey does admit that he is blessed, however, he doesn't seem to be very humble. I don't listen to him because of how he delivers his thoughts/beliefs. Besides, he's an entertainer and his livelihood requires that he maintains a strong following. I don't trust people who rely on ratings and who, ultimately, take orders from heads of the mainstream media. Follow Christ and you can't go wrong.

    Good luck to all who read these posts and God bless.

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  49. Dave calls himself a Christian and repeatedly uses the book of Proverbs as a guide. Well, how about this one Dave: "Diverse weights and measure are an abomination to the Lord."

    I recently emailed Goldstashforcash and asked them how much they would give me for a US Gold Eagle?
    They emailed back that an ounce of gold was worth abot $1750.00 and that they would give me $1425.00 for the coin. So these folks send me a mailer and postage (costs them about a $1.00) and I send them an ounce of gold worth $1750.00. They send me a check for $1425.00 and pocket $325.00 profit.
    These are the folks that Dave "endorses" as honest and upright people he knows personally.

    Hey Dave, Christian, Deacon and Spiritual Advisor:
    "DIVERSE WEIGHTS AND MEASURES ARE AN ABOMINATION TO THE LORD."
    Time to bone up on Proverbs again.

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