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To: CodeToad
No, it doesn’t and it has as much cash flow as a stock. In fact, it might actually have more.

You obviously know little about finance and investing. "Cash flow" means income that a corporation generates from the sale of goods or services, not the proceeds that an investor earns from the sale of a particular stock or other security. Gold does not have cash flow

I can sell it any number of gold dealers in town.

Perhaps, but that assumes that you live in a town with enough gold dealers to produce honest competition that minimizes the spread between the bid and ask price. Most of us do not have that luxuary and for most of us, that means that the price that we receive when we sell will be a substantially less than the price we pay to buy. (Yes, I understand that many stocks and ETF's also have a bid/ask spread, but because of competition, the spread is usually a few cents or less for widely traded securities).

Also, what happens when all the gold bugs decide to use their gold as cash because inflation has devalued the dollar? The market becomes saturated with gold, which increases the spread between the bid and ask price, which drives the price down, and effectively devalues gold as a currency.

24 posted on 09/10/2009 9:03:17 AM PDT by Labyrinthos
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To: Labyrinthos

Let’s see now, many of us bought Gold at less than $400 and silver below $10. Silver at $16 and Gold at $980. Not bad, even considering the loss in spot versus paid price.


42 posted on 09/10/2009 9:24:11 AM PDT by CodeToad (If it weren't for physics and law enforcement I'd be unstoppable!)
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