We Buy Gold
There is a whole new economy sprouting up just outside the walls of American suburbia and you’ll never hear a word about it.
Were it not for the loud, obnoxious, florescent yellow and pink signs pasted all across America that say “WE BUY GOLD”, you might not now about this new niche “economy.” It’s an economy most folks likely have never heard about because the parrots who “report” the news don’t usually frequent such establishments.
As the boys inside the beltway argue over what kind of recovery America is experiencing, Main Street is pawning family heirlooms and their gold teeth to pay the bills.
These “Cash for Gold” shops have sprouted up in almost every small town in America, and it looks like business is booming. Unless you take a helicopter to get to dinner, you have seen these signs plastered all across the country.
Reality TV has picked up on this booming sector of the economy with two new shows—Hard Core Pawn and Pawn Stars. These shows capture some excellent footage of how this parallel economy currently functions; people are selling everything from used vacuum cleaners to gold jewelry in a desperate effort to stay afloat for another week or month. Even some small businesses are using pawn shops for financing (Moneynews.com March 19, 2012).
Since millions of middle class people have lost their jobs, been downsized, or lost value in their homes, they are forced to find other credit and finance solutions outside the normal banking channels. Pawn shops are increasingly becoming the credit source for the poor and middle class who are locked out of the “great recovery.” For many families in America, great grandma’s silver spoons or Dad’s old pocket watch are the only “financing options” left before they get a padlock on the front door or their phone turned off.
These types of economic developments should serve as a serious wake up call to the leadership in this country that things are not healthy outside the polo club. Whatever you want to call it, it is a reflection of the seismic shift in wealth from Main Street to Wall Street. It’s a fair assumption that the gold fillings and wristwatches being pawned in mid-America a likely are not ever coming back in the form of any kind of investment dollars that will create new jobs in America. Some would say that this just another example of resources quietly shifting from the pockets of the “have nots” to the “haves.” We are watching a silent exodus of gold and heirlooms flowing out of blue collar neighborhoods and onto the balance sheet of Goldman Sachs and the Bank of China.
Perhaps the explosive growth of the “We Buy Gold” and pawn crowd is a good thing. Perhaps these businesses can help provide short term financing options for millions of people locked out of the traditional financing world. Maybe this is just a temporary “business cycle” that needs to play itself out. At least that’s what we keep hearing from the smart guys in the pinstriped suits on TV right? It’s just a normal business cycle that will “right itself” soon. Maybe the average American isn’t becoming statistically poorer and poorer every month. Maybe seeing a strip mall almost entirely vacant with the exception of the “We Buy Gold” store is somehow a good thing for the country?
The real question is what happens when all the silver spoons and gold watches from middle America have been sold and there is no more pawn items to sell for groceries and gas money? Maybe the season of “gold” signs will prove to be just another canary in the coal mine of warning of dangers ahead in this jobless “recovery.”